Originally published on: September 30, 2024
Bitcoin’s price took a hit recently, dropping by 4.1% on Sept. 30, causing concern among investors. The cryptocurrency retested the $63,500 support level, erasing gains made in the previous five days. Although an attempt to surpass $66,000 was made, it only lasted three days before facing a correction.
Investors are cautious as stock market futures in the US slipped 0.20%, waiting for US Federal Reserve Chair Jerome Powell’s outlook on the economy. Economic concerns are rising, especially related to the services and manufacturing sectors, as well as the upcoming September jobs report on Oct. 4.
The high short-term correlation between Bitcoin and the stock market has investors worried that a slowdown in the S&P 500 could negatively impact BTC price. In addition, talk of a potential bubble in the artificial intelligence (AI) sector has fueled concerns of market panic.
Mike Fishbein, a well-known figure in the AI space, believes that the problem isn’t the technology itself but rather the pricing and engagement strategies of service providers. He predicts that customers will start to demand lower prices, affecting the AI market’s revenue potential.
The global economy is also showing signs of weakness, with Europe facing economic challenges, particularly in Germany. An announcement by automaker Stellantis regarding its margins outlook has caused concern, leading to stock drops across the continent. The economic outlook for the Eurozone is also bleak, with Germany projecting zero or negative growth by 2024.
Adding to the instability is the tension in the Middle East, following recent attacks in Lebanon. If oil prices increase significantly, it could lead to higher inflation, limiting the US Federal Reserve’s ability to cut interest rates.
In light of these uncertainties, traders are moving away from riskier assets like cryptocurrencies, opting for safer investment options for the time being. While the long-term prospects for Bitcoin remain positive, current socio-economic conditions are influencing its price in the short term. As investors navigate these challenges, it remains to be seen how Bitcoin will fare in the face of ongoing economic uncertainty.
