Bitcoin below $50K in Largest Drop in Months
Bitcoin has fallen hard and fast and is dragging the rest of the crypto market down with it after a negative jobs report.
Although Bitcoin (BTC) nearly hit $70K less than a week ago it has dropped to $50,537 (BTC/USD) in a major market upheaval that has affected crypto tokens across the board.
In the early morning hours of Monday, the coin fell as low as $49,513, which is the lowest the coin has fallen since February of this year. Bitcoin has fallen more than 17% over the last 24 hours, and the crypto market is scrambling to deal with the massive drop. However, Bitcoin’s trade volume has spiked by 225% in that same period.
The crypto decline is following hot on the heels of stock market decline, where last week ended on a sour note for the stock markets after a disappointing jobs report. That report showed that unemployment had increased more than expected for July, leading many investors to expect that an economic recession could be on the way.
Are We Headed into a Recession?
For a recession to occur, there has to be extended negative economic reports coming in. Specifically, there needs to be two quarters in a row where the gross domestic product has dropped. Typically, when the GDP has dropped for a quarter, the banks, government institutions, and various businesses will work hard to reverse course. It is rare to see two quarters of negative growth, but that is the fear after last week’s jobs report.
That fear is echoed in the way investors are treating Bitcoin and the wider crypto market. We are seeing selloffs on a massive scale, not just for Bitcoin but also for Ethereum and a number of other tokens.
Even if there is no recession coming, the fear from the investment markets is going to continue until economic data reports some good news. Expect some minor price correction on stocks and cryptos that have dropped dramatically, but investors should also expect that the downturn will continue for a while.
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