Bitcoin’s price drop slowed over the weekend as buyers found support at the $60,000 mark. This support, combined with the 200-day moving average, has led to a short-term boost in the altcoin market. However, the overall crypto market still faces challenges due to weak employment reports, Middle East tensions, and recession fears. Will Bitcoin continue to drop throughout August?
This week, the cryptocurrency market saw a significant drop due to several negative factors affecting the broader market. The decline started when Bitcoin faced resistance at $70,000 and worsened mid-week due to Middle East tensions and recession fears.
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The recent weak employment report has led to expectations of a dovish shift in the market, increasing concerns about potential rate cuts in September. Nick Timiraos of The Wall Street Journal suggests these reports might prompt the Federal Reserve to adjust its monetary policy to stabilize the economy. Major financial firms Citigroup and JPMorgan anticipate the Fed will cut interest rates in a series, starting with a 50 basis point reduction in September, followed by another 50 basis points in November, and a further 25 basis points in December.

Impact of Rate Cuts on Borrowing and Crypto Investment
Data from the CME Group indicates a 78% chance of a 25 basis point cut in September and a 22% chance of a 50 basis point cut, reinforcing market expectations of rate reductions. JPMorgan predicts the Fed will lower its benchmark rate to around 3%, suggesting that cuts could continue until Q3 2025. Such rate cuts would improve borrowing conditions for banks and boost investment in riskier assets like cryptocurrencies. As a result, Bitcoin might find support at key technical levels such as the 200-day EMA and $50,000.
In the past five months, Bitcoin’s price has followed a sideways trend within a flag pattern, typically signaling a period of consolidation before a potential upward move. Recently, Bitcoin fell from the flag resistance at $70,000, dropping 14.84% to $59,800, causing the market cap to decline to $1.178 trillion.

The recent drop below $60,000 might intensify selling pressure, potentially driving Bitcoin down 14.5% to test the flag support trendline at $51,000. A bearish crossover between the 20-day and 50-day exponential moving averages suggests that sellers are gaining control. However, Bitcoin could bounce back from the $51,000-$52,000 range and stage a rally to reclaim the $60,000 level, with the potential to reach $70,000 afterward.