Bitcoin has maintained a bearish momentum since the US stock market crash on Tuesday. After dropping below $56k on September 6, BTC has made some recovery efforts over the past six hours. Currently, the leading cryptocurrency is trading at $56,778, with a minor 0.15% day-on-day gain.
Meanwhile, as BTC repeatedly fails to regain support at $58k, and with fears of a broader recession still looming, analysts are predicting a major drop in the near term.
A tweet from Arthur Hayes, former CEO of BitMEX, reported by major crypto publications, has further fueled fear in the market. On Friday, Hayes said he expects Bitcoin to drop to $50k levels.
Adding to the concern is a note from Goldman Sachs issued to investors. The investment giant, as reported by Bloomberg, warned that negative jobs data could trigger a correction in the US stock market.
Now that the US jobs data is out, the outlook is grim. Although payrolls increased by 142,000 in August, this figure is lower than expected. Additionally, the result is likely to further ignite debate around a potential rate cut from the US Federal Reserve.
Unsurprisingly, the Fear and Greed Index, a measure of overall market sentiment, is also in the red, showing extreme fear and down nearly 50% week-on-week.
Bitcoin Price Prediction: What Are The Chances Of A Short-Term Recovery?
A short-term recovery appears difficult. Despite US Presidential candidates taking a more pro-crypto stance before the upcoming elections, Bitcoin ETF funds continue to suffer. Bitcoin’s price action has been bearish amid fears of further US stock market declines.
While there were low expectations for the payroll data released today, much will depend on how broader markets react on Friday.
For intraday trading, $56K remains a crucial level as Bitcoin has managed to stay above it, despite sell pressure due to increased fear in the crypto markets. However, any notable recovery is only possible if BTC breaks the $58.5k resistance. For this to happen, a positive trigger is necessary, which seems unlikely at the moment.
Conversely, analysts are more focused on the possibility of a sharp decline. Earlier this week, analysts at Bitfinex warned that once Bitcoin starts tumbling, it could fall as low as $40k.
At press time, the US payroll data has just been released. Commenting on the results, New York Fed President John Williams has already called for a Fed rate cut.
In response to the payroll data from the Bureau of Labor Statistics on Friday, Dow Jones Industrial Average Futures dropped by 20 points, while other major indices remained flat.
If stock markets don’t fall further during Friday’s trading session, BTC may attempt a short-term recovery over the weekend.
