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The king of cryptocurrencies recently dropped back to $26,100. This unexpected decline has revived investors’ belief in the rise, despite the expectations of many experts. So, what is the current state of the crypto markets? Why is September 1st important for investors?
Why is Bitcoin and Cryptocurrencies Dropping?
The sending of Bitcoins to exchanges throughout the day has created expectations of short-term profit-taking. Investors faced panic selling due to the busy agenda of tomorrow. Particularly, the declines exceeding 5% in altcoins are noteworthy. So, why is tomorrow risky and important for crypto investors?
- The announcement of the first decision for SEC‘s 7 different spot Bitcoin ETF applications is expected. In all likelihood, it will be postponed.
- On the last day of the week, SEC has the potential to take action against the Grayscale court decision. This risk will continue for the next 43 days.
- We will see important data that will affect the future of cryptocurrencies on a macro level.
So, what are these data?
- US Average Hourly Earnings (Expectation: 0.3% Previous: 0.4%)
- US Non-Farm Payrolls (Expectation: 170K Previous: 187K)
- Unemployment Rate (Expectation: 3.5% Previous: 3.5%)
Average hourly earnings is a critical data in terms of whether the increase in inflation will continue. If wage increases continue, investors may see further declines in the crypto markets. We may see that the Non-Farm Payrolls data came in line with expectations, as ADP was the leading signal for this. On the employment front, JOLTS and many other data indicate that the easing the Fed wants has begun. We should note that the unemployment rate has now risen to 4.3%. If a figure between 3.5% and 3.7% is announced, it is neutral, but if a figure above 3.7% is announced, it will have a positive impact on crypto. In the opposite scenario, if unemployment falls, sales may gain momentum.
The decline in cryptocurrencies may have been triggered by concerns about tomorrow’s data and expectations of ETF applications being postponed.
Bitcoin (BTC) Current Analysis
If the price drops another $200-300, it will fall below the level before the Grayscale decision. We have explained the reason for this decline in detail above. So, what will happen next? The critical levels for investors are $25,500 and $24,800. Closures below these levels may pave the way for sales that could reach $22,000. On the other hand, regaining $26,700 and closing above it may open the door to a bigger rally.
