The fall in the price of Bitcoin led the market to reach the level of ‘fear’, as the price briefly fell below $56,000. BitMEX co-founder Arthur Hayes predicted that Bitcoin would fall to $50,000 over the weekend, potentially a further 12% decline.
The cryptocurrency market’s ‘fear and greed’ index, which measures market sentiment on a scale of 0 to 100, fell to 22 on September 6, citing a state of ‘extreme fear’. This is the lowest level since August 8, when the index reached 20, and the first time ‘extreme fear’ has entered the territory since August 12.
Bitcoin has lost about 2.7% of its value in the past 24 hours, falling to $55,838. This decline wiped out nearly $30 billion in Bitcoin’s market capitalization.
Arthur Hayes shared his pessimistic outlook on platform X, saying, “I’m targeting below $50,000 this week. You open a short position. Pray for me, I’m an adventurer.’ His outlook comes amid growing concerns about a slowing U.S. economy and disappointing jobs data, which weighed on market sentiment.
Other major cryptocurrencies also saw sharp declines, with Ethereum down 2.23%, Solana down 2.82%, and XRP down 2.19%. These declines resulted in the liquidation of positions worth $94.26 million, including $36.71 million from long bitcoin trades and $17.36 million from long Ether trades.
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Important data expected
Today, the US government will release its August Nonfarm Employment Report, which will be one of the important economic data the Fed should consider ahead of its interest rate meeting later this month.
Economists expect the United States to add 164,000 jobs in August, up from 114,000 in July. The unemployment rate is expected to fall to 4.2% from 4.3%. While a stronger-than-expected or even predictable report is likely to cause the Fed to cut its benchmark federal funds rate by 25 basis points, a weak figure is sure to cause traders to rush to price a move by 50 basis points.
This week’s economic news balance – the Institute for Supply Management’s manufacturing PMI and the August jobs report from ADP have been weak so far, reinforcing the idea that the Fed may take a bolder path in easing policies. According to the US interest tracker on Investing Saudi Arabia, there is a 44% chance of a rate cut by 50 basis points versus 34% one week ago.
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