The leading cryptocurrency, Bitcoin, has been on a downtrend ever since it broke above $65,000 on August 25.
Analysts said this downtrend was characterized by short and shallow ups and downs, indicating a classic bullish sell mentality.
At this point, the downtrend continued, with the BTC price falling below $57,000 as concerns about the US economy prompted investors to sell risky assets.
Speaking to Coindesk, BRN analyst Valentin Fournier said the recent decline was likely due to concerns about rising recession risks in the U.S., and that investors were choosing to reduce exposure to riskier assets like Bitcoin.
“BTC has given up previous day’s gains and dropped below $57,000. This decline is due to concerns about the US economic recession.
Recent economic reports increasingly suggest that the risk of recession should not be ignored.
The ISM manufacturing index fell 0.5% short of expectations, with job openings at 7.7 million compared with 8.1 million expected.
Given the current economic uncertainties and potential for reduced liquidity, we recommend reducing exposure to BTC and waiting for a better entry point before increasing investment.”
Volatility Will Continue in Bitcoin This Week!
Singapore-based cryptocurrency trading firm QCP Capital also shared its updated analysis and said that Bitcoin prices will continue to be volatile this week.
Analysts noted that Bitcoin briefly rose above $58,500 during US trading hours but then dropped below $57,000 during Asian trading hours, and wrote that increased volatility will continue throughout the week.
” On September 4, net outflows in US spot Bitcoin ETFs were at their lowest level in six trading days.
“BTC volatility is up 6% from lows this week. Based on yesterday's Bitcoin Volatility Momentum Indicator (VMI), we expect volatility to remain elevated.”
*This is not investment advice.
