Bitcoin slid back toward $55,000 overnight as it caught up with Tuesday’s broader market sell-off.
On Wednesday, the price of the flagship cryptocurrency was lower by more than 2% at $56,481.90, according to Coin Metrics. It fell sharply Tuesday night — to as low as $55,673.80 — with the start of Asia-Pacific trading but has stabilized since then.
Coinbase and MicroStrategy fell 3% and 2%, respectively.
Tech stocks struggled in U.S. trading Tuesday – the sector is coming off worst day since September 2022 – while two readings of manufacturing production showed signs of weakness, rekindling fears about the health of the economy. Japan’s Nikkei 225 and the broad-based Topix finished Wednesday trading with their worst one-day loss since the Aug. 5 sell-off.
Lately, bitcoin’s moves are sometimes more muted than stocks’ during U.S. hours on big market days. James Davies, co-founder at crypto trading platform Crypto Valley Exchange, explained that traders react “more dynamically” to macro events during Asia trading.
“U.S. crypto trading accounts for around 30% of global volume, but it’s largely driven by institutional activity, especially in derivatives like CME futures, which are often less reactive to immediate market trends they have seen coming,” he said. “In contrast, the Asian market, contributing close to 50% of global volume, is more retail-focused. As a result, during Asian trading hours, bitcoin tends to respond more actively to global financial movements, such as stock market shifts.”
August was a tough month for bitcoin and its poor trading action could go on for another month. Analysts have warned that the cryptocurrency could slide back to $50,000 in September as traders wait for a sense of direction to emerge about U.S. interest rate cuts and the looming presidential election.
September is historically the worst month for bitcoin. The coin has finished higher in just three of the last 11 Septembers and the month has the largest average loss of the year for the coin at 4.8%, according to CoinGlass.