Bitcoin and Ether Slide as Markets Reel from Disappointing U.S. Data
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Written by
Yana Levkovich - Updated 2024-09-09 14:22:14
Bitcoin and Ether remain below key price levels after experiencing a dip over the weekend, which followed the release of disappointing U.S. economic data on Friday.
The downward trend began after Friday’s release of the U.S. non-farm payroll (NFP) data. This data is a critical indicator of employment, inflation, and overall economic health in the U.S. The report showed that 142,000 jobs were added in August, falling short of the market expectation of 160,000.
“To see higher crypto prices, we needed a nearly perfect result from the NFP data,” said Augustine Fan, Head of Insights at SOFA.org. Unfortunately, we got one of the worst possible scenarios. This triggered a re-evaluation of risk sentiment, which dragged down Bitcoin and Ether prices.”
Fan added that recent economic indicators suggest U.S. private sector growth is slowing down, hitting its weakest point in over a decade. He warned that a recession now appears more likely than previously thought.
Following the release of the data, Bitcoin's value dropped to as low as $52,850, while Ether briefly sank to $2,160 on Friday.
However, there was some positive news. The U.S. unemployment rate, which was also announced on Friday, fell to 4.2%, providing a more optimistic outlook. “The lower unemployment figure has reduced some of the immediate fears of a recession,” said Lucy Hu, a senior analyst at Metalpha. “But despite this, the lower-than-expected payroll data seems to be dominating market sentiment right now.”
More to come this week
Hu went on to explain that the crypto market responded more dramatically to the numbers compared to traditional equities. She predicted that volatility in the crypto space would likely continue until the next Federal Reserve meeting, scheduled for September 17-18.
“We could see more risk reduction throughout the coming week,” added SOFA.org’s Fan. “With few positive catalysts in sight, market focus will shift to key events, including the upcoming U.S. Presidential Debate, along with a busy week of economic data releases and speeches from central banks around the world.”
The first televised debate between U.S. Presidential candidates Donald Trump and Kamala Harris is expected to take place soon. Reports suggest that the debate between the two is very close. Cryptocurrency has been one of the major topics leading up to the November election, although it wasn’t brought up in the last debate between Trump and current President Joe Biden.
Later in the week, the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) reports will be released on Wednesday and Thursday, respectively. These data points will be closely watched, as they provide further insight into inflation trends and the overall state of the economy.
