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Bitcoin It fell back to $55,000 overnight as it caught up with Tuesday’s broader market selloff.
On Wednesday, the price of the flagship cryptocurrency was hovering below the $57,813.84 level, according to Coin Metrics. The price fell sharply to $55,673.80 on Tuesday evening as Asia-Pacific trading began, but has since stabilized.
Bitcoin plunges overnight but holds steady at $56,000
Technology stocks struggled in U.S. trading on Tuesday as the sector suffered its worst day since September 2022, while two manufacturing production data showed signs of weakness, reigniting concerns about the health of the economy. Japan’s Nikkei 225 and the broad-based Topix ended Wednesday with their worst one-day losses since the Aug. 5 sell-off.
Recently, Bitcoin has at times been more subdued than stocks during the U.S. session on big market days. James Davies, co-founder of cryptocurrency trading platform Crypto Valley Exchange, explained that traders react “more dynamically” to macro events during trading in Asia.
He said: “Cryptocurrency trading volume in the United States accounts for about 30% of global trading volume, but this is mainly driven by institutional activity, especially derivatives such as CME futures, which tend to respond to the immediate market trends they see. The reaction is smaller. “In contrast, the Asian market, which accounts for nearly 50% of global trading volume, is more retail-focused. Therefore, Bitcoin tends to react more positively to global financial trends (such as stock market movements) during Asian trading hours. “
August has been a tough month for Bitcoin, and its poor trading behavior may continue for another month. Analysts warn that the cryptocurrency could fall back to $50,000 in September as traders await U.S. interest rate cuts and a sense of direction from the upcoming presidential election.
September was the worst month in Bitcoin history. According to data from CoinGlass, the token has closed higher in only three of the past 11 Septembers, with that month seeing the largest average decline for the token this year at 4.8%.
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