Bitcoin (BTC) dropped by 1.62% in the last 24 hours, falling below the $57,500 threshold, resulting in a weekly loss exceeding 10.5%. Despite historical expectations of a downward trend in September, investor concerns have increased.
Capital Flows into Stablecoins
After pulling back from the $65,000 level last week, Bitcoin’s intensified decline reflects a broader shift in market sentiment as capital flows into stablecoins. This shift indicates growing caution among investors, who prefer stablecoins, pushing their total market value to a record near $170 billion. Analysts interpret this trend as a sign of decreased short-term confidence in Bitcoin, with investors possibly expecting more significant declines before re-entering the market.
Key Support Levels Threatened
Crypto analyst Rekt Capital highlighted that Bitcoin was trading below the crucial support level of $58,540 just hours before the weekly candle close. Closing below this level could pave the way for further declines, while maintaining the uptrend requires a close above $59,000. Given the current price movement, a close above $59,000 is considered an unlikely scenario.
Impact of US Employment Data
Meanwhile, the upcoming US employment data and its impact on the Federal Reserve’s interest rate decision in September will play a crucial role in Bitcoin’s trajectory. Currently, Bitcoin is in a strong reconsolidation phase. Rekt Capital reminded that historically, Bitcoin tends to make significant moves approximately 150-160 days after block reward halvings, warning that if past patterns repeat, a breakout might not occur until the end of September.
Amid the current market conditions and expectations regarding US employment data, investors' attention is focused on Bitcoin and its ability to hold key support levels.
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