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Bitcoin experienced a significant downturn on Thursday, plummeting to levels unseen in over six months, as investors demonstrably reduced their exposure to riskier assets. This pullback coincided with mounting speculation regarding the Federal Reserve’s potential interest rate policy next month.
The leading cryptocurrency touched a low of $86,325.81 during the trading session, marking its weakest level since April 21st. It last traded at approximately $86,690.11.
The trigger for this market shift appears to be the release of surprisingly robust U.S. jobs data. The positive figures have introduced uncertainty into the equation of whether the Federal Reserve will proceed with lowering its benchmark overnight rate. The U.S. economy saw the addition of 119,000 jobs in September, substantially exceeding the 50,000 figure predicted by economists surveyed by Dow Jones.
This economic data directly impacted market expectations, pushing the probability of a December rate cut down to approximately 40%, according to analysis of futures contract pricing.
Bitcoin’s decline occurred within the context of a broader retreat across the cryptocurrency market. XRP was down, trading below $2.00, while ether experienced even steeper losses, shedding over 3% to trade significantly below the $3,000 mark. Dogecoin remained relatively stable.
Interestingly, the cryptocurrency sell-off also exerted downward pressure on equities. This correlation held true despite a notably positive earnings report from Nvidia. A growing number of traders maintain positions in both AI-linked stocks and Bitcoin, creating a linkage between the two asset classes and leading to correlated trading patterns.
Furthermore, Bitcoin’s recent price trajectory has been influenced by a series of liquidations of highly leveraged crypto positions that began in early October. This cascade effect has amplified the market’s volatility and contributed to the overall downward trend. Analysts note that the unwinding of these leveraged positions is still ongoing, potentially signaling further near-term price weakness. The combination of macroeconomic uncertainty and the deleveraging within the crypto market creates a challenging environment for digital assets.
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