Bitcoin Price Drops to $57,775 Amid Recession Fears; Quick Outlook

Bitcoin, the leading cryptocurrency, experienced a sharp drop in price on Thursday afternoon, triggering widespread market liquidations. The decline has alarmed investors, especially since it coincided with releasing U.S. inflation data that had initially appeared promising.

In just under an hour, Bitcoin’s value plummeted by nearly 3%, reaching $57,787, according to CoinGecko. Other prominent cryptocurrencies, including Dogecoin and Solana, also suffered substantial losses.

The market’s sudden collapse led to approximately $176 million in liquidations within a day, with Bitcoin alone accounting for over $50 million and Ethereum positions nearing $59 million.

JUST IN: #Bitcoin just fell below $57K. pic.twitter.com/R4VJAizzq1

— CoinGecko (@coingecko) August 15, 2024

The downward trend in Bitcoin’s price appears to be linked to growing concerns about a potential global economic recession, despite U.S. inflation easing to 2.9%—the lowest level since 2021.

While Bitcoin is often viewed as a hedge against inflation, it is not typically considered a safeguard against broader economic slowdowns, leading to diminished investor confidence in riskier assets.

In Bitcoin both side liquidation is going equal..59K and 56K both can be next touch and go scenery for #Bitcoin now..let's see which one goes first to eat pic.twitter.com/SpXsGslXjG

— Sumit Chatterjee (@smt_chatterjee) August 16, 2024

Earlier this week, Bitcoin’s price briefly surged to $61,791, fueled by positive news about Bitcoin exchange-traded funds (ETFs) and significant investments from financial giants like Goldman Sachs and MicroStrategy.

However, this optimism was short-lived, as macroeconomic concerns, particularly those stemming from the latest U.S. Consumer Price Index (CPI) report, weighed heavily on the market.

Despite the CPI showing a 2.9% annual growth—the lowest since March 2021—investors remained wary.

JUST IN! The US #CPI numbers for July are BELOW expectations:

-> CPI + 2.9% YoY (EST. +3.0%)
-> CORE CPI + 3.2% YoY (EST. +3.2%)

The price of $BTC dipped to $61K after spiking towards $61.8K. Currently, #Bitcoin is trading at $61.3K pic.twitter.com/xUkuD3gE9Y

— CryptoPotato Official (@Crypto_Potato) August 14, 2024

The CPI report highlighted that housing costs were the primary driver of inflation, contributing to 90% of the overall increase. This has sparked speculation that the U.S. Federal Reserve might initiate steep interest rate cuts in September, potentially adding further uncertainty to the cryptocurrency market.

In summary, Bitcoin’s recent decline can be attributed to a mix of factors, including fears of a global economic downturn, cascading liquidations, and the impact of recent U.S. inflation data.

While traditional markets have shown resilience, the cryptocurrency market remains highly volatile, as evidenced by the significant losses incurred by Bitcoin and other major digital assets.

Bitcoin Price Outlook

Bitcoin is currently trading at $58,497, showing signs of consolidation just below the 50-day EMA at $59,710. This level acts as a critical resistance, and the price is forming a symmetrical triangle pattern, indicating potential for a breakout.

The RSI is at 46.83, suggesting a neutral to slightly bearish momentum. Immediate resistance is at $60,548, with further resistance levels at $62,704 and $64,189.

On the downside, support lies at $58,449, with additional levels at $56,804 and $54,734. A break above $60,548 could trigger a bullish move, while a decline below $58,449 may lead to further downside pressure.