Crypto bleeds into the weekend – BTC struggles below $57K

Historically, the weekend has been known to have negative effects on the crypto industry. This weekend is no different. At the time of writing, Bitcoin (BTC) is worth $56,436.05, up 0.5% from an hour ago and 3.0% from yesterday. 

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On the other hand, the global crypto market cap is now $2.17 trillion, up 4.32% in the last 24 hours and 78.21% in the last year. Friday’s U.S. non-farm payrolls (NFP) report saw equities indices hit new highs, but the figure failed to revive the crypto market.

Crypto markets struggle into the weekend

The unloading of seized Bitcoin by German and US agencies, as well as “preemptively selling” as the estate of defunct Japanese exchange Mt. Gox began refunding investors last month, have been important drivers for the drop.

The selling pressure is unlikely to subside in the short run. According to statistics from blockchain tracing tool Arkham Intelligence, the German government still owns over $2.2 billion in Bitcoin, the US government has more than $12 billion, and the Mt. Gox estate owns more than $8 billion.

Crypto investor sentiment has reached its lowest point since the end of the 2022 crypto winter, as Bitcoin’s drop below $57,000 impacted digital asset markets.

The widely following Crypto Fear Greed Index, created by data provider Alternative.me , measures market enthusiasm for Bitcoin and other major cryptocurrencies, with 0 representing extreme fear and 100 representing extreme greed.

Source: Alternative.me

The indicator fell to 26 on Saturday, its lowest level in the fear zone since early January 2023, when bitcoin was trading around $17,000 following 2022’s severe bear market.

The metric notably issued a bullish sell signal in March when it reached the 90 level, near what turned out to be (so far) the 2024 top of the larger crypto market and Bitcoin’s all-time high of over $73,500. 

Since then, BTC and Ethereum are 25%-30% lower, while altcoin majors have dropped approximately 50% and minor tokens even more.

US non-farm payroll data has little effect on crypto

The NFP reading for June exceeded expectations, with a gain of 206,000 jobs compared to the projected increase of 190,000, as reported by the U.S. Bureau of Labour Statistics. Unemployment in June saw a slight increase to 4.1%, surpassing the 4% threshold for the first time since November 2021.

As bond traders digested yesterday’s NFP data, Treasury yields and the dollar index both moved downward. On the other hand, stock futures saw a slight increase, reaching new highs. In pre-market trading, Dow Jones Industrial Average futures saw a slight increase of 0.033%, while SP 500 futures also experienced a minor rise of 0.013%.

Additionally, prior to yesterday’s reading, the Chicago Mercantile Exchange (CME) FedWatch tool indicated a 72% probability of a rate cut in September. Based on yesterday’s reading, the odds for September have not changed.

Source: CME Fedwatch tool

Despite the available positive data, Bitcoin’s price has continued to decline and has now fallen below $57,000.

Cryptopolitan reporting by Florence Muchai