Bitcoin $59,001 At the time of writing, the price is preparing to pull the daily low even lower. BTC is at $58,158. In the last 24 hours, the price had fallen to $58,112. In addition to the decline in cryptocurrencies, things are not going well in the US stock markets either. What is the reason for the September 16 market decline?
Cryptocurrencies Are Falling
USA stock markets It was opened 15 minutes before the article was prepared and Bitcoin price It has fallen to its daily low. This is not surprising because we have witnessed a downward trend in cryptocurrencies with the opening of US markets for a long time. We often write that even after good data (for example, the latest August inflation data) cryptocurrencies can fall with the market opening.
BTC made a new daily low at $58,021 and has now rebounded to $58,110. The ongoing volatility Coinbase (COIN), MicroStrategy (MSTR), NVIDIA triggered a loss of more than 3% in its shares.
The Fed and Recession Fears
When we shared the August 2024 bankruptcy data, we mentioned that these figures represented one of the worst Augusts in the last 4 years. The massive bankruptcies in large companies increased concerns about the US economy. What we noted in the unemployment report was that more than 50 percent of layoffs occurred in technology companies.
Bankruptcies are on the rise, layoffs at tech companies are at historic levels, and NVIDIA Shares of major technology companies such as are losing 3 percent of their value daily. There is only one reason for this: concerns about the approaching economic recession.
If the Fed were to cut by 50bp, this could lead to assessments that fears of recession have reached the top. But the data already shows that the economy is cooling. The unemployment rate is at 4.3% and employment figures are being revised downwards significantly. In addition to all this, we need to consider the historical decline experienced by risk markets in environments where the Fed is making policy changes.
Powell If it cannot give the desired message to the markets on Wednesday and cannot reflect its belief in an optimistic picture about a soft landing, things may become difficult in these few months. On the other hand, falling interest rates means abundant liquidity and rising risk markets. In other words, if things do not deteriorate with big surprises in the medium term, crypto and stocks should recover.
However, the European Central Bank announced that they expect inflation to increase in the fourth quarter. So what will happen? If there is an increase on a global scale, this will mean the beginning of a worse period with rising commodity prices amid concerns of a global recession. We will live and see.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
