Bitcoin falls below $60,000 as recession fears grow

Bitcoin (BTC) price fell below $60,000 on Saturday amid growing concerns that the U.S. could be headed toward a recession, according to data from TradingView.

According to Crypto Briefing, the recent price drop followed a rough Friday marked by a weaker-than-expected U.S. jobs report and a massive cryptocurrency transfer from crypto lender Genesis.

The U.S. economy added 114,000 jobs in July 2024, significantly lower than the 175,000 expected, according to Labor Department data. The unemployment rate unexpectedly rose to 4.3%, the highest level since October 2021.

The figures have heightened concerns about the health of the U.S. economy, especially after the Federal Reserve decided Wednesday to keep interest rates at a range of 5.25% to 5.5%.

Federal Reserve Chairman Jerome Powell has hinted that he could consider cutting rates in September if economic data improves. But economists worry that the U.S. economy is weaker than the Fed realizes. The current recession could prompt an earlier rate cut to boost demand.

A cooling jobs market and rising unemployment rates have sparked selloffs in global stock markets, with major indexes such as the Dow Jones Industrial Average and the S&P 500 plunging in early trading Friday.

Bitcoin, which started the week near $70,000, fell below $62,000 on Friday and extended its decline over the weekend, data from TradingView shows. The leading cryptocurrency is currently hovering around $60,000, down more than 11% in a week.

As losses mount, investor sentiment has turned bearish. The Crypto Fear and Greed Index has fallen to 37, moving from “greed” to “fear” for the first time in three weeks, according to data from Alternative.me.

Bitcoin Ready for Relief Rally: Santiment

Cryptocurrency analytics firm Santiment recently posted on X that Bitcoin is set for a price rebound after a week of poor performance.

📊 The crypto markets have been in a general downtrend, with traders once again demanding BTC below $50k. However, history shows that when the 7-day average trader return for top caps like BTC, ETH, ADA, XRP, DOGE, and LINK is this low, the chances of a bounce are quite high. pic.twitter.com/cBGQ6cxyt2

— Santiment (@santimentfeed) August 2, 2024

According to Santiment, the market value to realized value (MVRV) ratio, which measures the average profit or loss of Bitcoin holders, is currently at minus 5.5%. Historically, such lows have preceded price increases. The firm noted that Bitcoin has previously experienced two surges of 7% and 9% (July 4 and 25) when MVRV has fallen to these levels.

Santiment also pointed out that other major cryptocurrencies, including Ethereum, Cardano, Ripple, Dogecoin, and Chainlink, are showing similar signs of undervaluation based on their MVRV ratios.

While past performance is not indicative of future results, Santiment’s data suggests that Bitcoin and some major altcoins could see a relief rally.