“The ‘September Curse’ continues to loom over the financial markets on Wednesday, with struggles in the US stock and cryptocurrency markets.
Data from the US Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey showed that US job openings decreased from a revised 7.91 million in the previous month to 7.67 million in July, falling below economists’ expectations. Job openings in July reached their lowest level since the beginning of 2021, accompanied by an increase in layoffs, consistent with signs of a slowdown in worker demand.
Following the release of this data, the Fed Watch tool on the Chicago Mercantile Exchange showed that the market currently expects a 49% possibility of a 50-basis-point interest rate cut by the Federal Reserve on September 18th. Additionally, the US 2-year/10-year Treasury yield curve turned positive for the second time since 2022, intensifying investors’ concerns about an economic recession in the US.
In the US stock market, the S&P 500 index and the Nasdaq index closed down by 0.16% and 0.30% respectively, while the Dow Jones index rose by 0.09%.
According to Bybt data, Bitcoin broke below the support level of $56,000 in the early hours of Wednesday, reaching an intraday low of $55,567, before the bulls pushed it back above $58,000. At the time of writing, the BTC trading price was $58,010, with a 24-hour decline of 0.25%.
In the altcoin market, the performance was mixed among the top 200 tokens by market capitalization. 1inch Network (1INCH) led with a 21.6% increase, followed by Aave (AAVE) and GMT (GMT) with gains of 11.9% and 11.6% respectively. Sun (SUN) was the biggest loser, falling by 9.2%, followed by Flux (FLUX) with an 8.5% decline and Toncoin (TON) with a 7.4% decline.
Currently, the total cryptocurrency market capitalization is $2.03 trillion, with Bitcoin’s dominance rate at 56.5%.
Analysts at Secure Digital Markets pointed out in a report that the RSI has been forming bullish divergences since last week, indicating a potential weakening of selling pressure. However, despite these short-term signals, long-term technical indicators remain unclear, and Bitcoin is still in the middle of a long-term downtrend with no clear direction.
Market analyst Bloodgood warned that this weakness may persist for a while and could potentially cause Bitcoin to fall below $50,000.
In the latest market update, Bloodgood stated, “The retreat in Bitcoin continues, and last week we discussed that the accumulation area looked weak, and we saw a break of that level before the end of this week. Breaking below the accumulation area could confirm our theory of new lows. If that’s the case, then $46,700 is in sight, and making some bids around that level may be wise. This theory will be invalidated if the bulls manage to push Bitcoin back above the breakout area around $59,000.”
In addition to the correlation between the performance of assets such as Bitcoin and tech stocks, Bloodgood stated that the real driving force in the market is still the Federal Reserve.
He pointed out that the recent pullback of tech stock newcomer Nvidia has led the market downturn, with the cryptocurrency market following suit. However, this does not change the long-term prospects of cryptocurrencies. He added, “What is more important is how the Fed and the Treasury Department will take action to stabilize the stock market and keep bond yields at an acceptable level. With the election approaching, they will act as soon as possible. The Fed’s rate cut is earlier than expected, which is why most people’s main goal should be not to be scared away by volatility during this period.”
While investors eagerly await the first interest rate cut, cryptocurrency data analyst Brett reminded users on the X platform that historical data shows interest rate cuts are often accompanied by significant stock price declines, giving no reason to believe that this time will be different.
In his analysis on Twitter, he stated, “We are 15 days away from the Fed’s first interest rate cut of this round. Using the same time frame, I overlaid the following past rate cut cycles: 1981, 1990, 2000, and 2007. These four rate cut cycles match the data we are currently seeing (rising unemployment, 10-year/2-year yield inversion, etc.), and the bull’s view that rate cuts are good for the market is true in the long run… However, history shows that the market tends to rise for an average of 25 days after an interest rate cut, followed by an average of 13 months of selling.”
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