BTC Drops as US Economic Data and NVIDIA Slump Spur Market Risk Aversion

Bitcoin Drops Below $58,000 Amid US Economic Uncertainty

On Tuesday, September 3, BTC declined by 2.77%, reversing a 3.08% gain from the previous session, closing at $57,529.

US Economic Data and NVIDIA Lead to BTC Sell-off

On Tuesday, US Manufacturing PMI numbers impacted market risk sentiment and BTC demand. The ISM Manufacturing PMI increased slightly from 46.8 in July to 47.2 in August. Economists expected a higher PMI.

Despite recent US economic indicators signaling a soft economic landing, recession fears linger. Tuesday’s risk aversion came as investors considered crucial US economic data in the week.

Service sector PMI and labor market data will influence buyer demand for BTC. Positive trends across the services sector and labor market could end fears of a US hard landing while supporting bets on a September Fed rate cut.

NVIDIA (NVDA) tumbled by 9.53%, leading the tech sector into negative territory. The Nasdaq Composite Index slid by 3.26%, its largest single-day loss since July 24 (-3.64%).

Risk Aversion Extends to the US BTC-spot ETF Market

The market risk aversion spilled into the US BTC-spot ETF market on Tuesday. According to Farside Investors,

• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $162.3 million, its largest single-day outflow since May 1.
• Grayscale Bitcoin Trust (GBTC) reported net outflows of $50.4 million
• ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $33.6 million.
• Bitwise Bitcoin ETF (BITB) reported net outflows of $25.0 million.

Excluding flow data for iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market saw net outflows of $287.8 million, extending its outflow streak to five sessions.

The current outflow streak coincides with lingering concerns about oversupply.

US Government Supply Risks Linger

BTC demand-supply trends remain pivotal for BTC price trends. Oversupply risk, linked to the US government’s BTC stockpile remains a potential headwind. The US government currently holds 203,239 BTC ($12.07 billion).

Significant transfers from the US government’s BTC stockpile to crypto exchanges could lead to oversupply. Furthermore, oversupply may impact demand and drive prices lower, particularly amid the persistent ETF market outflows.

US government BTC transfers in July and August kickstarted a BTC pullback from $70,000.

Oversupply could push BTC down toward $55,000. Conversely, a rebound in US BTC-spot ETF market inflows could drive BTC toward $65,000.

Investors should remain alert amid possible changes to supply-demand trends and shifting sentiment toward the US economy. Stay updated with our latest news and analysis to manage exposure to BTC and the broader crypto market.

Technical Analysis

Bitcoin Analysis

BTC sat below the 50-day and 200-day EMAs, affirming bearish price signals.

A break above the 200-day EMA and the $60,365 resistance level would support a move toward the 50-day EMA. Furthermore, a breakout from the 50-day EMA could give the bulls a run at the $64,000 resistance level.

US labor market data, sentiment toward the Fed rate path, and BTC-spot ETF market flow trends require consideration.

Conversely, a drop below $57,500 could signal a fall toward $55,000. A fall through $55,000 might bring the $52,884 support level into play.

With a 42.72 14-day RSI reading, BTC could drop below $55,000 before entering oversold territory.

Ethereum Analysis

ETH lingered below the 50-day and 200-day EMAs, affirming bearish price signals.

An ETH return to $2,500 could bring the $2,664 resistance level into play. Furthermore, a breakout from the $2,664 resistance level may signal a move toward $2,800.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH drop below the $2,403 support level could signal a fall toward the $2,124 support level.

The 14-period Daily RSI reading, 38.73, suggests an ETH break below the $2,403 support level before entering oversold territory.