Bitcoin continued to lose considerable ground amid a generally gloomy mood on the financial markets on Monday.
The price of the oldest and best-known cryptocurrency plummeted to $51,600 on the Bitstamp trading platform on Monday morning, reaching its lowest level since February, before rallying slightly. Bitcoin has lost around $10,000 in value since Friday. The last time there was a comparably sharp price slump was in June 2022. The fall continues a trend that began last week.
German analyst Timo Emden, from Emden Research, spoke of a “cocktail of uncertainty” that is currently weighing on Bitcoin. “In particular, the newly sparked fears of recession in the US are catching investors on the wrong foot,” he said, according to German news agency dpa.
Read | Ethereum ETFs approved: Another win for cryptocurrencies
There have been several disappointing economic data releases in the U.S. in recent weeks. In particular, an unexpectedly weak labour market report from the US government caused concern. In July, unemployment in the world’s largest economy rose to its highest level for almost three years.
In addition to Bitcoin, other cryptocurrencies also came under heavy selling pressure at the start of the week. The price of Ether slumped by around 15 percent to $2,340. This represents a setback for the newly launched Ethereum ETFs, which were intended to attract new investors in the U.S. The recent price losses have significantly reduced the market capitalization of all cryptocurrencies. It fell by around 14 percent to $1.85 trillion. Bitcoin’s share was recently put at around 56 percent. The price performance over the past week shows once again volatility in cryptocurrencies trading.
US unemployment climbs
The U.S. weekly jobless claims report revealed an increase in the number of Americans filing new applications for unemployment benefits to an 11-month high last week, signaling weakness in the labor market. However, claims tend to traditionally be more volatile around this time of the year.
The report from the Department of Labor also revealed that the number of people on jobless payrolls rose in mid-July to the highest level since late 2021, fueling fears of a rapid labor market decline, which started last month when unemployment rose to a 2.5-year high of 4.1 percent in June.
Initial claims for state unemployment benefits increased by 14,000 to a seasonally adjusted 249,000 for the week ending July 27, the highest level since August 2023. U.S. weekly jobless claims rose above the upper end of their 194,000-245,000 range for this year. The four-week moving average of claims, which excludes seasonal fluctuations, rose 2,500 to 238,000 last week.
Meanwhile, unadjusted claims declined by 10,012 to 215,827 last week. That was less than half of the 21,901 declines that the seasonal factors had expected.
For more markets news, click here.
