Bitcoin and Ether dropped sharply amid broader market declines and economic concerns, with Bitcoin falling below $58K as investors brace for further turbulence in September.
The cryptocurrency market took a hit early on Tuesday as Bitcoin (BTC) and Ether (ETH) experienced sharp declines, mirroring the broader downturn in U.S. stock markets. This latest sell-off underscores the growing uncertainty in the market as investors grapple with weak economic data and inflation concerns.
At around 10:00 AM EST, Bitcoin was trading at $57,800, down 1.5%, while Ether dropped 3% to $2,442, its lowest level since February. The broader CoinDesk 20 Index, which tracks the performance of major cryptocurrencies, fell by 1%, though some digital assets like Lumens (XLM) and Litecoin (LTC) managed modest gains.
The slump in cryptocurrencies coincided with a significant drop in U.S. equities, with the Nasdaq declining by 2.4% and the S&P 500 falling 1.5%. The market’s reaction followed the release of the ISM Manufacturing PMI report for August, which indicated continued contraction in the U.S. manufacturing sector. The report showed a drop in new orders and a rise in prices paid, pointing to stagflation—a scenario where inflation rises despite a stagnant economy.
These developments have heightened speculation about the Federal Reserve’s next move, with traders now betting on a possible 50 basis point rate cut in September, up from 30% the previous day, according to CME FedWatch. The outcome may hinge on the August employment report due this Friday, which is expected to show a rebound in job growth.
September has historically been a tough month for Bitcoin, with the cryptocurrency experiencing declines in seven of the last ten years. This seasonal trend suggests that the recent sell-off may continue, although some analysts, like Galaxy Research’s Alex Thorn, remain hopeful that October could bring a recovery, as it has often been Bitcoin’s best month.