Bitcoin aimed to reclaim $62,000 on Aug. 3, recovering from a sharp decline that saw it nearing the $60,000 mark. This followed a widespread sell-off in global stock markets.
BTC Price Dips to $60,000 Amid Stock Market Sell-Off
Data from TradingView showed Bitcoin rebounding by 3% after hitting multi-week lows of $60,435 on Bitstamp. The cryptocurrency’s fall mirrored a grim day for stocks, with Japan’s Nikkei dropping 6%, leading to losses on Wall Street. U.S. employment data, which significantly missed expectations, added to the market panic.
BTC/USD 4-hour chart. Source: TradingView
Bitcoin lost nearly $5,000, breaking through several key support levels, including the short-term holder cost basis. Liquidations surged, with CoinGlass data indicating a total crypto longs wipeout of $230 million over Aug. 1 and Aug. 2.
Market Reactions and Future Outlook
Michaël van de Poppe, CEO of trading firm MNTrading, noted that U.S. yields plummeted due to dismal job reports, sparking widespread panic as markets anticipated a substantial recession in the U.S. He suggested that recent events likely confirmed the Federal Reserve would cut interest rates at its September meeting, a potential bullish trigger for crypto and risk assets.
Source: The Kobeissi Letter
“Rate cuts for September are confirmed,” van de Poppe concluded.
The Kobeissi Letter, a trading resource, highlighted the mixed signals in the macroeconomic landscape. It noted a shift in discussions from whether a September rate cut would happen to whether the cut would be 25 or 50 basis points. CME Group’s FedWatch Tool indicated a 78% market probability of a 0.25% cut.
Global Liquidity: A Bullish Case for Bitcoin
Despite the market shock, bullish perspectives on Bitcoin persisted. Jeff Ross, founder and managing director of hedge fund Vailshire Partners, pointed to rising global liquidity as a positive indicator for BTC price action. He shared a chart comparing the global M2 money supply to BTC/USD, suggesting that a reverse head-and-shoulders pattern on the weekly chart, combined with increasing global M2, would be highly bullish.
BTC/USDT chart. Source: Daan Crypto Trades/X
Even before the recent downturn, traders anticipated Bitcoin retesting the lower end of its long-term trading range. Daan Crypto Trades noted that Bitcoin has been trading within a range for over five months, with key levels at $59K and $74K for the lows and highs, respectively.
As Bitcoin navigates market volatility, its performance remains closely tied to broader economic signals and liquidity trends.
