Originally published on: September 30, 2024
In recent news, Bitcoin’s price took a hit, declining by 4.1% and retesting the $63,500 support level, erasing gains from the previous days. While the recent attempt to surpass $66,000 was short-lived, the correction did not catch bulls off guard, with only under $40 million in leveraged long futures being liquidated.
Investors are keeping a close eye on US Federal Reserve Chair Jerome Powell’s comments on the economic outlook, as concerns grow about the services and manufacturing sectors. Additionally, worries about the upcoming September jobs report are adding to the uncertainty in the market.
Traders believe that Bitcoin’s high short-term correlation with the stock market could negatively impact its price if the S&P 500 experiences a slowdown. Furthermore, fears of a potential bubble in the artificial intelligence (AI) sector are causing market panic, with investors turning to safe-haven assets like government bonds and cash.
Mike Fishbein, author of the “AI Marketing Brief” newsletter, highlights concerns about the AI market crash, emphasizing the unsustainable subscription fees for AI services. He predicts that lower pricing for these services could reduce revenue potential in the future, impacting the affordability of AI hardware.
The global economy is also showing signs of weakness, with economic conditions deteriorating in Europe. Automaker Stellantis recently lowered its margin outlook, while Volkswagen is considering cost-cutting measures, including potential factory shutdowns in Germany.
The escalating tension in the Middle East following recent attacks in Lebanon is adding to economic risks globally. Israeli Prime Minister Benjamin Netanyahu’s statements suggest that current actions may not be sufficient, potentially leading to higher oil prices and increased inflation.
Overall, with the socio-economic environment deteriorating and investor fears mounting, Bitcoin’s bullish momentum is struggling to hold. Traders are opting for safer investment options in the near term, moving away from risk-on assets like cryptocurrencies to navigate the current uncertain market landscape.
