Bitcoin struggles below $50,000 amid rising Israel-Iran tensions and declining US economic activity

Bitcoin's (BTC)  price shows weakness on Monday, trading 12% lower at $50,898 at the time of writing, amid a slowdown in US employment as shown in the Nonfarm Payrolls (NFP) report for July published on Friday and rising Israel-Iran tensions. The situation was further impacted by bankrupt crypto lender Genesis moving $1.5 billion in Bitcoin and Ethereum for creditors’ repayments, with no signs of a buy-the-dip scenario from traders, who faced $1.02 billion in liquidations. This confluence of factors has led to a significant downturn in global markets, with Bitcoin prices dropping below $50,000 at the start of the week.

Daily digest market movers: Bitcoin drops as US economy slows down

• Recent US economic reports reveal rising unemployment and reduced business investments. July's unemployment rate surged to 4.3%, and Bitcoin's price has since crashed below $50,000, reflecting a broader downturn in the crypto market.

• In the ongoing Gaza conflict, the brink of a potential "World War 3 teaser" has emerged due to rising tensions between Israel and Iran, sparked by the assassination of Hamas leader Ismail Haniyeh in Tehran. This escalation has led to a significant downturn in global markets, with Bitcoin prices plummeting below $50,000 on Monday.

• Santiment's data indicates that the current fall in Bitcoin and Ethereum is similar to the decline in early July, but there is a noticeable lack of enthusiasm for buying the dip. Traders might start showing interest if Bitcoin approaches $50,000 or Ethereum hits $2,000, which are key psychological levels.

Bitcoin Santiment Social chart

• According to Arkham Intelligence showed on Friday, the bankrupt crypto lender Genesis transferred $1.5 billion in Bitcoin and Ethereum to repay creditors, a move likely fueling Fear, Uncertainty, and Doubt (FUD) among traders and contributing to Bitcoin's recent price decline.

• According to the Liquidation Heatmap chart from Coinglass, in the past 24 hours, 267,842 traders were liquidated, for a total of $1.02 billion. The largest single liquidation order happened on Huobi—BTC/USD, valued at $27 million. If BTC continues to decline, more traders will be liquidated, fueling Fear, Uncertainty, and Doubt (FUD) among traders.

Liquidation Heatmap chart

Technical analysis: BTC shows weakness as it breaks below the ascending trendline 

Bitcoin's price fell below the ascending trendline (drawn by joining multiple swing lows from July 5) on Friday, leading to a 5.6% decline over the next two days. As of Monday, it is trading 12% lower at $50,898, having tested the daily support level at $49,917.

If BTC closes below the daily support at $49,917, it could continue to crash 11% and retest its weekly support at around $44,297.

The Relative Strength Index (RSI) and the Awesome Oscillator on the daily chart have dropped below their neutral levels of 50 and zero, respectively, signaling a bearish trend according to these momentum indicators.

BTC/USDT daily chart

However, a close above the August 2 high of $65,596 would change the market structure by forming a higher high on the daily timeframe. Such a scenario might drive a 6% rise in Bitcoin's price to retest its weekly resistance at $69,648.