(Kitco News) – Bitcoin (BTC) struggled to find momentum below $58,000 overnight as the top crypto slid back below $57,000 amid a spike in put options that suggests traders see more downside in the near term.
Thursday morning brought the latest U.S. jobs data, with August private payrolls rising by 99,000, well below expectations of 144,000 and the smallest gain since January 2021. Market watchers now look to Friday's jobs report for August, which will be one of the final data points influencing the Fed’s decision on rate cuts at the FOMC meeting on Sept. 18.
The CME FedWatch Tool shows that the uptick in underperforming data of late has boosted expectations for a 50 bps rate cut, with Wall Street now putting the odds at 41%.
While investors have clamored for rate cuts since the beginning of 2024, the realization that stock market pullbacks have historically followed rate cuts has many limiting their exposure to markets, leading to increased volatility and choppy price action.
“The Asian session continues to be tough for cryptocurrencies,” noted Alex Kuptsikevich, senior market analyst at FxPro. “The total market capitalization had risen to $2.05 trillion the previous evening, recovering from a drop earlier in the day. Still, selling prevailed again at the start of the new day on Thursday, bringing the capitalization back to $2.0 trillion (+0.8% in 24 hours).”
“Bitcoin is down for the ninth day out of the last 11 as its attempt to consolidate above the 200-day average triggered an intensified sell-off,” he added. “This pattern persists into Thursday morning as the price continues to test the lows of the last four months.”
BTC/USD Chart by TradingView
“Rising financial markets and a weaker dollar did not help Bitcoin gain strength,” Kuptsikevich said. “It is possible that the weakness in cryptocurrencies is a manifestation of a very limited risk appetite, and the rest of the markets may soon follow the lead of cryptocurrencies.”
While things look bleak for Bitcoin as the ‘September curse’ wreaks havoc across financial markets, some analysts see this as the last good buying opportunity of the year and predict BTC will climb to new highs before the end of 2024.
“The recent market decline at the beginning of September is often referred to as the ‘last drop,’ with prices expected to hit new highs by the end of the year,” said Gracy Chen, CEO of Bitget. “Many analysts remain quite optimistic about Bitcoin’s price outlook for Q4 2024.”
“Standard Chartered has raised its year-end BTC forecast from $100,000 to $150,000,” she noted. “The company also predicts that Bitcoin will reach $250,000 in 2025 and stabilize around $200,000 in the third quarter of 2025.”
Chen added that while “The outlook for the fourth quarter of 2024 remains positive,” she warned investors to be mindful of “the risk of black swan events related to geopolitical conflicts, government actions, and US elections, which can dramatically change market conditions.”
“Some of them are already putting downward pressure on Bitcoin's growth,” she said.
“In a scenario without any black swan events, Bitcoin could potentially break through the $100,000 threshold by November, experience a correction, and then begin its climb toward the $200,000 range,” Chen said. “Therefore, although the early September drop may have caught some analysts off guard, the overall sentiment remains bullish about Bitcoin's price performance in the coming quarters.”
“The current market disappointment is related to market performance, but it also reflects an ingrained mindset from previous bull-bear cycles,” she observed. “The most classic example is anchoring expectations around Bitcoin halving events, assuming Bitcoin operates in a semi-independent market with high expectations of price increases due to scarcity.”
“However, I think with Bitcoin ETFs becoming an important tool in the crypto trading market, the price is more dependent on the ebb and flow of dollar liquidity,” Chen concluded. “So, in this cycle, the bull-bear cycle may not progress as quickly as before. Likely, the bull market peak will gradually arrive in step with interest rate cuts and increased liquidity.”
According to long-term crypto and stock investor Jelle, the current summer chop session has gone on for 190 days, while the 2023 summer chop lasted 219 days, which suggests that the BTC uptrend will resume near the start of October.
Day 190 of chop-season today.
The previous summer chop lasted for 219 days, after which price more than doubled in the months that followed.
If this chop-season lasts as long as the previous one, it will end around the start of October.#Bitcoin pic.twitter.com/dXYMVCbmM9— Jelle (@CryptoJelleNL) September 4, 2024
At the time of writing, Bitcoin trades at $56,603, a decrease of 1.81% on the 24-hour chart.
