Bitcoin (BTC) hit its lowest price since early August, dropping to $55,500 during Wednesday’s Asian trading session. This decline coincided with major losses across U.S. and Asian equity markets, where several prominent stocks saw declines of up to 10%. As a result, Bitcoin wiped out nearly all its gains from the previous month.
The broader cryptocurrency market reflected a similar downward trend, with the CoinDesk 20 (CD20) index—a measure of the largest tokens by market capitalization—falling by nearly 6%. Among the hardest-hit were Solana (SOL) and Ether (ETH), both of which dropped more than 7%.
U.S. and Asian Markets Drop Amid Economic Uncertainty
On Tuesday, U.S. stocks in the Nasdaq 100 and S&P 500 fell sharply, with losses reaching 3.5% for some companies. This marked the beginning of September’s traditionally bearish market trends, compounded by weak manufacturing data that renewed concerns over a potential economic slowdown.
Asian markets mirrored the U.S. downturn. Japan’s Nikkei index fell by more than 4% in early trading, continuing the fallout from last month’s unwinding of the Yen carry trade, a strategy that has been rattling investors.
Weak Manufacturing Data Stokes Fears of Economic Slowdown
Economic uncertainty deepened further with the release of August’s Institute for Supply Management (ISM) manufacturing index. Although the index showed a slight recovery from July’s numbers, it remained below the critical 50-point mark, indicating that U.S. manufacturing activity continues to contract.
This was the fifth consecutive month of decline in the index, underscoring persistent weakness in the manufacturing sector. The data has intensified concerns about the broader economy, affecting both traditional and crypto markets alike. The manufacturing index is often seen as a key economic indicator, and its prolonged contraction suggests that fears of an economic slowdown are gaining momentum, driving both stock and cryptocurrency markets lower.
