Bitcoin Plunges to $60,500 on US Recession Fears

The US stock market and cryptocurrency markets have seen a sell-off in the past 12 hours due to a spike in unemployment.

On the evening of August 2, US employment data showed that the unemployment rate in the world's largest economy in July reached 4.3%, higher than the expected 4.1%.

This information quickly created concern in financial markets as investors worried that this could be a sign of a new economic recession, causing the red to spread.

The technical term for the payroll report that just came out is "dumpster fire". pic.twitter.com/zYes7albu0— Lyn Alden (@LynAldenContact) August 2, 2024

Major US investment indices such as the S&P 500, Nasdaq and Dow Jones all fell by 2-2.9% in the trading session on August 2, their worst results in many months.

The total capitalization of the US stock market fell by $ 1.2 trillion in the same session, while the global stock market lost $ 2.9 trillion, with Japan recording its worst trading day since 1987.

JUST IN: Over $ 2.9 trillion has been wiped out from major indices and stocks this morning due to growing fears of a global recession.

This is the worst day for stocks since March 16, 2020, during the COVID-19 pandemic fears. pic.twitter.com/qIPu7xiz5X— Jacob King (@JacobKinge) August 2, 2024

With the stock market and economy in turmoil, bets that the Federal Reserve will have to cut interest rates this September have skyrocketed. The Fed this week continued to hold rates steady amid uncertainty about inflation.

Traders on polymarket are predicting a 60% chance that there will finally be a rate cut amid a tanking stock market ! https://t.co/UZxMfO1f9w— *Walter Bloomberg (@DeItaone) August 2, 2024

The crypto market has also been affected by the above events, with Bitcoin price falling from $65,000 to $60,500 in the past 12 hours, its lowest level since mid-July. BTC was also previously affected by news that the Middle East conflict could heat up again after Israel assassinated the leader of the Hamas Islamist movement in the middle of the week.

Thus, since returning to the $70,000 mark on July 29, BTC has dropped 13.5% in value in just 1 week.

Ethereum has fallen even more severely, losing 7% of its value to once again return to the $2,910 price range.

Other major altcoins are also seeing red, down 3-15% from this time yesterday.

The latest correction in the crypto market has seen nearly $310 million in derivatives liquidations in the past 24 hours, with longs accounting for 87%.