James Ding
05 Aug 2024 15:58
Bitcoin (BTC) fell 11% last week, hitting a low of $49,130 amid widespread economic uncertainty and market turmoil.
According to Bitfinex Alpha, Bitcoin (BTC) experienced a significant price drop, dropping 11% last week to hit a low of $49,130. This is the lowest price since February 14. The downtrend accelerated on August 2, recording the largest daily drop since April 2, of 6.01%, bringing the total all-time high to 14.52%. The altcoin Solana (SOL) in particular showed a larger decline.
Market instability and liquidation
Bitcoin failed to hold key support at $65,580, suggesting further downside potential. Liquidations totaled $1.16 billion in the last 24 hours, mainly affecting long positions. Despite the bearish market sentiment and significant declines in Japanese and US stock markets, the price is expected to move slightly higher towards the $55,000 region. However, the overall market trajectory will depend on macroeconomic factors.
Economic and political development
The widespread market instability, influenced by economic and political developments, is affecting cryptocurrencies and traditional financial markets. The recent turmoil in the Japanese stock market and the losses on Wall Street highlight the interconnectedness of global markets. The correlation between BTC and traditional financial markets is increasing, so if the stock market decline continues, there will likely be continued downward pressure.
Meanwhile, the U.S. labor market showed clear signs of slowing, with the unemployment rate rising to 4.3% from a record low of 3.4% in April 2023. This increase represents the highest unemployment rate since October 2021. Job growth slowed markedly, with only 114,000 new positions added in the month. Despite these signs of a cooling market, the June job openings report showed a modest decline, and the previous month’s revisions suggested a steady but not alarming slowdown.
The Federal Reserve’s Position
Amid these labor market concerns, the Federal Open Market Committee (FOMC) decided on July 31 to hold the federal funds rate steady in the range of 5.25 to 5.5 percent, potentially signaling a shift toward looser monetary policy. Adding a positive element to the economic story, labor productivity surged in the second quarter, underscoring the continued strength and resilience of the economy despite labor market challenges.
Crypto-Sphere Update
According to the latest news in the cryptocurrency industry, Genesis Global has completed its restructuring and started repaying approximately $4 billion in digital assets and US dollars to creditors since its bankruptcy in January 2023. Bitcoin creditors will recover 51.28%, Ethereum creditors 65.87%, Solana creditors 29.58%, and creditors who owe stablecoins or US dollars will be repaid in full.
Meanwhile, MicroStrategy expanded its Bitcoin holdings by acquiring 12,222 Bitcoins for $852 million in Q2 and introduced a new KPI called BTC Return to measure the performance of its Bitcoin strategy. Despite positive growth in software subscriptions and global Bitcoin adoption, MicroStrategy reported a significant quarterly loss and missed revenue and earnings estimates.
In contrast, Tether reported record net income of $5.2 billion in the first half of 2024 and net operating income of $1.3 billion in the second quarter, driven by revenue-generating investments and reserves. As of June 30, 2024, Tether had $118.4 billion in circulating token reserves, $113.1 billion in debt, and a surplus of $5.3 billion.
For more information, visit Bitfinex Alpha.
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