Bitcoin Flirts With One-Month Low as Risk-Off Mood Grips Global Markets

- Bitcoin flirted with a one-month low amid a wider retreat from riskier investments in global markets due to fears about the economic outlook.

Bitcoin slipped further from one-month lows on Wednesday as broader risk-off sentiment gripped global markets amid deepening concerns over the health of the US and Chinese economies.

The world’s largest digital asset dropped more than 4% at one stage before recovering some of those losses to trade down about 0.6% at $56,635 by 12:45 p.m. Singapore time. Most other major tokens, including ether, also nursed losses.

Signs of economic weakness in the US and China have rattled investors, sparking the worst spell for global stocks since an Aug. 5 rout. The sour mood spilled over into crypto markets, with traders keeping a close eye on US jobs data due Friday for any signs of a deeper slowdown.

In the options market, there is rising demand for hedges against Bitcoin declines, both for the period following the upcoming US payrolls data as well as for the aftermath of the November presidential election, according to Sean McNulty, director of trading at liquidity provider Arbelos Markets.

“We’ve seen renewed downside buying interest in Bitcoin options, especially for post-payroll strikes at $55,000 and lower,” said McNulty. One notable position was also opened for contracts expiring Nov. 29 at a $35,000 strike, he added.

That could be a hedge against a scenario where Republican presidential nominee Donald Trump, who is seen as being more supportive of crypto, loses the race to Democratic Vice President Kamala Harris, who has yet toعلن موقفها بشأن الأصول الرقمية.

Other signs of caution include a drop in aggregate open interest — outstanding contracts — for CME Group Inc. Bitcoin futures to the lowest since May. US Bitcoin exchange-traded funds, meanwhile, have posted their longest streak of net outflows since June, according to data compiled by Bloomberg.

Fairlead Strategies LLC technical analyst Katie Stockton, in her latest research note, shifted to a “long-term neutral bias” for Bitcoin. The balance of risks is skewed toward a possible test of the $52,000 to $50,000 price range, according to Tony Sycamore, a market analyst at IG Australia Pty.

Bitcoin’s rally this year has fizzled somewhat since hitting a record high of $73,798 in March. The immediate seasonal outlook is challenging, if history is anything to go by. Over the five years through 2023, the original cryptocurrency posted an average September loss of more than 8%, according to data compiled by Bloomberg.

©2024 Bloomberg L.P

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