Bitcoin and Ether have seen a decline of up to 5% as concerns over the U.S. economic slowdown grow, exacerbated by weak manufacturing data. The global crypto market cap has dipped below the $2 trillion mark, echoing investor unease.
Impact of US Economic Data
Recent data from the Institute for Supply Management (ISM) highlighted persistent weaknesses in U.S. manufacturing, with the August PMI rising slightly to 47.2 from 46.8 in July. A PMI below 50 signifies contraction, affecting the broader economic outlook and contributing to fears of a recession. Given that manufacturing makes up 10.3% of the U.S. economy, such data can significantly impact market sentiment.
Crypto Market Reaction
As of 1:02 pm IST, Bitcoin was trading 4% lower at $56,508, with Ethereum down 5.2% to $2,385. The negative sentiment extended across the broader market, affecting major cryptocurrencies like BNB, Solana, XRP, Dogecoin, Toncoin, and Cardano. "Bearish sentiment in cryptocurrencies is impacted by the ISM Manufacturing PMI data," noted Shivam Thakral, CEO of BuyUcoin.
Interplay Between Markets
The intertwined dynamics of traditional and crypto markets are becoming pronounced as traders align expectations with the Federal Reserve’s interest rate strategies. This heightened sensitivity suggests that economic indicators could spur volatility yet also present opportunities for growth, given robust trading activities.
Upcoming Economic Reports
The market is keenly awaiting upcoming U.S. reports on job openings, jobless claims, and the crucial nonfarm payroll report. These will be pivotal in assessing whether anticipated interest rate cuts by the Federal Reserve will materialize and to what extent.
"Bitcoin’s selling pressure reflects declines in both U.S. and Asian markets. Investors are closely watching U.S. data for clues on potential Federal Reserve rate cuts," said Edul Patel, CEO of Mudrex. In the near term, Bitcoin's support is around $56,350, with potential further decline to $53,500.
Global Crypto Market Outlook
The global crypto market cap has fallen by 4.34% to roughly $1.98 trillion in the last 24 hours. Stablecoins now account for $62.96 billion, or 92.79% of the total crypto market's 24-hour volume, according to CoinMarketCap. The market cap of Bitcoin alone has dropped to $1.11 trillion, with its dominance at 56.18%. BTC's 24-hour trading volume surged by 28.8% to $32.9 billion, indicating heightened market activity.
(Disclaimer: The views expressed by experts are their own.)
