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The Federal Reserve will cut interest rates in response to a deteriorating market outlook.
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Analysts attribute the ongoing market decline to geopolitical tensions.
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Bitcoin dropped below $50K for first time since February.
Analysts predict that the Federal Reserve will respond to the recent market decline by cutting interest rates in this month. They suggest that this move is intended to prevent the ongoing decline in asset values from spreading to real economy, triggering a depression.
Analysts believe that the current market crash was caused by a combination factors, such as Japan’s recent rate hike and the relatively weak economic data in the United States. These events revealed significant global imbalances which had accumulated to extreme levels. They were further exacerbated due to growing geopolitical tensions.
The cryptocurrency sector is not immune to the chaos, as it has seen a significant drop in the last ten days. Bitcoin in particular continued its downward spiral, after closing below the $60,000 key level on Sunday.
TradingView data shows that a few hours into the week, the flagship cryptocurrency fell another 14.75 percent, dropping below $50,000 and reaching $49,647 on early Monday morning. Bitcoin led other cryptocurrencies, with Ethereum falling to $2,116. The total crypto market cap fell below $2 trillion, reaching $1.694 trillion, for the first time in February.
The U.S. Government released a disappointing figure on employment last Friday. The non-farm payroll number, which was expected to be revised downwards from 179,000 in June to 114,000, came out at 114,000, sparking recession fears. Analysts insist that the figure does not portend a recession. Many of them also think that the Sahm Rule was only triggered to divert attention from the increasing geopolitical tensions.
Bitcoin was trading at $51,007 as of the time this article was written. The bearish momentum is becoming more evident on the crypto market. The flagship crypto’s role as a store-of-value remains intact, while bulls struggle to keep its price above $50,000 psychological support.
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