Bitcoin (BTC) Price Drops Below $54,000 as Market Anticipates a Rate Cut from the US Federal Reserve

The Bitcoin price dropped below $54,000 on September 6 as the flagship crypto experienced a massive wave of sell-offs from traders.

Bitcoin price dropped below $54,000 on Monday, September 6, as the world’s largest cryptocurrency faced a massive wave of sell-offs from traders.

This price decline was largely sparked by developments on the macroeconomic side, which painted a bearish outlook for Bitcoin.

Bitcoin’s trajectory was further cast into doubt by revisions to the July and June job reports, which showed that the U.S. added fewer jobs than was initially reported in those months.

As previously reported by NewsBTC, Bitcoin had already had an unpleasant start to September, which is historically very bearish for the leading cryptocurrency.

Earlier in the week, Bitcoin suffered a price crash as the markets were still feeling the effects of the “Yen carry trade.” This follows significant volatility in the U.S. stock market, with over $1.05 million being wiped out on September 3.

Macroeconomic factors have been primarily responsible for Bitcoin’s recent bearish price action and the broader crypto market, especially with a rate cut from the U.S. Federal Reserve still in the balance.

It is worth mentioning that the July job reports (the lowest job additions over the last two years) and the Yen carry trade were responsible for the August 5 market crash, which caused Bitcoin to drop below $50,000.

Interestingly, Arthur Hayes, the co-founder of the BitMEX crypto exchange, stated that he expects Bitcoin to drop below $50,000 this weekend, revealing that he had opened a short position.

A Rate Cut Looking More Unlikely

For a while now, the crypto market has been anticipating that the Fed will cut interest rates at its next FOMC meeting, which will be held between September 17 and 18. Bernstein analysts predicted that this move would provide some form of bullish momentum for Bitcoin’s price.

However, a rate cut, especially by 50 basis points (bps), is now unlikely following the release of the job data.

Crypto commentator The Kobeissi Letter highlighted in an X (formerly Twitter) post that the odds for a 50bps have dropped to 23% on the prediction markets.

The Fed might no longer be in a hurry to cut rates since the situation in the labor market isn’t as dire as it was initially feared following the release of the July jobs report.

Whatever happens, crypto analysts like CryptoCon are confident that the worst is almost over for Bitcoin.

CryptoCon recently noted that Bitcoin was mirroring its price action from the 2016 market cycle and suggested that the flagship crypto was gearing up for its next leg up, which would take it to a new all-time high (ATH).

At the time of writing, Bitcoin is trading at around $54,150, down almost 4% in the last 24 hours, according to data from CoinMarketCap.

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