Bitcoin nears $54K as August NFP report sparks liquidations
- US releases NFP jobs data for August, which once again came in below expectations.
- NFP report has historically affected the price of Bitcoin and, ultimately, the crypto market.
- Bitcoin's price slid under $55K, sparking nearly $82 million in liquidations.
- Kaito AI data suggests that bearish pressures for BTC are still low.
Bitcoin (BTC) dived below the $55K level on Friday as the general crypto market saw declines following the release of the August Nonfarm Payrolls (NFP) report. With unemployment dropping to 4.2% as expected, eyes are now turned to the Federal Reserve (Fed) meeting later in the month. Meanwhile, key data shows that the current bearish trend in the crypto market does not reflect aggressive selling pressure.
Bitcoin drops lower as NFP report rocks crypto market
Bitcoin took the entire crypto market into a downtrend on Friday following August's US NFP report release.
The NFP report measures the change in the number of employed workers in the US, excluding farmers. The report is considered a vital indicator of the economy's state and has historically impacted the price of Bitcoin and the overall crypto market.
The August NFP report stated that August saw an addition of 142K new jobs, which was more than 11% below the consensus 160K figure. Likewise, hiring from prior reports in both June and July were revised much lower, giving the impression that the labor market is beginning to hurt.
Following the release of the NFP data, Bitcoin's price dipped 4.7% to under $54K, its lowest level since early August. The decline resulted in nearly $82 million in BTC liquidations, per Coinglass data.
Additionally, Bitcoin's further price decline caused a general downturn in the entire crypto market, which is down 4.7% in the past 24 hours.
The meme coin market fell nearly 6%, with major meme tokens Dogecoin (DOGE) and Pepe (PEPE) seeing declines of 7% and 4%, respectively.
AI tokens also had their fair share of declines on the day, with the market cap of the entire AI-tokens category dipping 7% in the past 24 hours.
Despite the general market downturn, Kaito AI suggests that bear market mentions for BTC are still low, indicating that the current bearish pressure is not too strong.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
