Bitcoin Value Falls to $55.5K Following $1 Trillion Stock Market Decline and Poor U.S. Economic Indicators

Bitcoin saw a significant drop on Wednesday, falling from over $65K to $55.5K during a substantial $1 trillion sell-off in the stock market.

The cryptocurrency’s decline followed a 3.5% decrease in the Nasdaq 100, with major technology companies such as Apple and Nvidia losing more than $550 billion in total market value.

This market instability, along with disappointing U.S. economic indicators, continues to exert downward pressure on Bitcoin prices.

Bitcoin Declines Amid $1 Trillion Stock Market Drop

On Wednesday, Bitcoin sharply decreased, falling from over $65K to a low of $55.5K during Asian trading hours, before experiencing a slight recovery.

This decline was triggered by a $1 trillion loss in global stock markets, influenced by a 3.5% drop in the Nasdaq 100. Major companies like Apple, Nvidia, and Amazon collectively lost over $550 billion in market capitalization, contributing to the overall market strain.

• Japan’s Nikkei index fell by more than 4%, adding to the global market volatility.
• Weak U.S. manufacturing statistics intensified concerns regarding a potential economic downturn.

The US Stock market lost over a trillion dollars today!!!
That sounds very dramatic until you realize it is only 2%, actually ending the day down only 1.7%. pic.twitter.com/4mgPYh6wMh

— Lark Davis (@TheCryptoLark) September 3, 2024

The worldwide market sell-off, combined with worries about a slowdown in U.S. economic growth, significantly impacted Bitcoin, further contributing to its decline.

Terraform Wallet Transfers $62M in Bitcoin Amid Do Kwon’s Legal Issues

On September 2, a wallet associated with Terraform Labs and co-founder Do Kwon moved $62 million in Bitcoin (over 1,075 BTC). This transfer raises concerns due to Kwon’s ongoing legal challenges.

Having been arrested in Montenegro in 2023, Kwon is facing extradition requests from both the U.S. and South Korea, following allegations of fraud related to Terra’s collapse in 2022.

[ARKHAM] Terraform Labs Transfers $62.81M in #Bitcoin to New Address, Leaving Only $2M in Altcoins Remaining pic.twitter.com/Cbiuc8akCo

— BecauseBitcoin.com (@BecauseBitcoin) September 3, 2024

• The $62M transfer coincides with Terraform’s $4.5 billion settlement with the SEC.
• Ongoing bankruptcy proceedings in the U.S. add further complications.
• This transaction may be affecting Bitcoin’s recent price drop.

As Terraform faces increasing legal scrutiny, the timing of this substantial Bitcoin transfer has attracted considerable attention from market analysts.

Trump’s Crypto Initiative Linked to $2 Million DeFi Hack Raises Security Concerns

Recently, former President Trump and his sons introduced World Liberty FinancialCoin (WLFI), a governance-oriented cryptocurrency. However, concerns have emerged due to its similarities with Dough Finance, a DeFi application that was hacked earlier this year, resulting in a $2 million loss.

• WLFI’s white paper indicates parallels to the compromised platform.
• Concerns about the security of the new initiative have been raised.
• Trump’s entry into the crypto space represents a notable shift, as he had previously criticized the industry.

World Liberty Financial, a crypto project associated with the Trump family, is a credit account system built on Aave and Ethereum. The project is said to be inspired by the DeFi protocol Dough Finance and plans to issue a “non-transferable” governance token called WLFI.…

— Wu Blockchain (@WuBlockchain) September 4, 2024

The timing of the WLFI launch, coinciding with Bitcoin’s recent downturn, has raised concerns. Some speculate that traders may be hesitant due to the high-profile nature of Trump’s involvement and the project’s association with a previously hacked platform.

DJT: For too long, the average American has been squeezed by the big banks and financial elites. It’s time we take a stand—together. #BeDefiant https://t.co/DuEtfRfrjt pic.twitter.com/txPz5FVSsK

— Donald Trump Jr. (@DonaldJTrumpJr) August 22, 2024

Investors are adopting a cautious approach, highlighting the risks and uncertainties surrounding cryptocurrency valuations.

Bitcoin Experiences Bearish Pressure Below Key $57,445 Threshold

Bitcoin (BTC/USD) is currently trading at $56,590, down 1.57%, indicating a bearish trend. The 4-hour chart illustrates that Bitcoin is trapped in a downward channel, with significant resistance around the $57,445 pivot point.

If Bitcoin falls below immediate support at $55,573, prices could decline further to $54,000 or even $52,138.

Bitcoin Price Chart – Source: Tradingview

The Relative Strength Index (RSI) is at 33, indicating that Bitcoin is oversold, yet no significant reversal appears imminent.

The 50-day Exponential Moving Average (EMA) at $59,068 is providing resistance, maintaining a bearish outlook unless Bitcoin surpasses $57,445.

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The post Bitcoin Price Drops to $55.5K Amid $1 Trillion Stock Market Sell-Off and Weak U.S. Data appeared first on Cryptonews.