Amid a $1 trillion stock market sell-off and weak U.S. data, the price of bitcoin drops to $55.5K.

Posted by cryptonews Crypto News September 4, 2024 2.6k Views

Wednesday’s steep decline in bitcoin saw it fall from over $65K to $55.5K in the midst of a massive $1 trillion sell-off in stocks.

The decline in cryptocurrency came after a 3.5% decline in the value of the Nasdaq 100, which included large tech companies like Apple and Nvidia losing over $550 billion.

The weak U.S. economic data and market volatility are keeping pressure on Bitcoin prices today.

Bitcoin Falls Amid $1 Trillion Stock Market Decline

During Asian trading hours on Wednesday, Bitcoin saw a precipitous decline, plunging from over $65K to as low as $55.5K before somewhat rebounding.

The decline came after a $1 trillion collapse in world stock markets, primarily caused by a 3.5% decline in the Nasdaq 100. The market pressure increased as major stocks such as Apple, Nvidia, and Amazon lost over $550 billion in market value.

  • Weak U.S. manufacturing data heightened fears of an economic slowdown.
  • Japan’s Nikkei dropped more than 4%, adding to global volatility.

The sell-off in the global markets and worries about the slowing growth of the US economy put a lot of pressure on Bitcoin and contributed to its decline.

A wallet associated with Do Kwon, a co-founder of Terraform Labs, and the company transferred $62 million in Bitcoin (more than 1,075 BTC) on September 2. Concerns are raised by this movement because of Kwon’s ongoing legal disputes.

Following allegations of fraud following Terra’s collapse in 2022, Kwon was arrested in Montenegro in 2023 and is the subject of extradition requests from both South Korea and the United States.

  • The $62M transfer coincides with Terraform’s $4.5 billion SEC settlement.
  • Ongoing U.S. bankruptcy proceedings add further complications.
  • The transaction may be influencing Bitcoin’s recent price decline.

Market watchers have taken a keen interest in the timing of this sizable Bitcoin transfer, given the mounting legal pressure Terraform is facing.

Trump’s Crypto Project Linked to $2 Million DeFi Hack Raises Security Concerns

A cryptocurrency with a focus on governance called World Liberty FinancialCoin (WLFI) was recently introduced by former President Trump and his sons. But because of the app’s resemblance to Dough Finance, a DeFi app that was hacked earlier this year and cost $2 million, worries have been raised.

  • WLFI’s white paper reveals parallels to the breached platform.
  • Questions arise about the security of the new project.
  • Trump’s involvement in crypto marks a significant shift as he previously criticized the industry.

There have been questions raised by the timing of the WLFI launch and the recent decline of Bitcoin. Some theorize that because of the project’s link to a previously compromised platform and Trump’s prominent involvement, traders are on the defensive.

Investors are reacting with caution and highlighting the unknowns and hazards associated with cryptocurrency valuations.

Bitcoin Faces Bearish Momentum Below Key $57,445 Level

With a 1.57% decrease, the price of bitcoin (BTC/USD) is $56,590, indicating a bearish trend. According to the 4-hour chart, Bitcoin is trapped in a downward channel, with the pivot point at $57,445 serving as important resistance.

Prices of Bitcoin could drop even lower to $54,000 or even $52,138 if it breaches the immediate support level at $55,573.

Bitcoin Price Chart – Source: Tradingview

With a Relative Strength Index (RSI) of 33, it appears that Bitcoin has been oversold, but a significant reversal is still a ways off.

Until Bitcoin breaks above $57,445, the 50-day Exponential Moving Average (EMA) at $59,068 is adding resistance, maintaining the bearish outlook.

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