Bitcoin’s price made a modest recovery on August 3 after briefly dropping toward $60,000, following a significant global stock sell-off. The cryptocurrency managed to reclaim the $62,000 level as markets showed signs of stabilization after a fresh wave of liquidations.
BTC Price Rebounds Amid Stock Market Turmoil
Data from TradingView indicated a 3% rebound in Bitcoin’s price, following a multi-week low of $60,435 on Bitstamp. The drop came amid a bleak day for global stock markets, with Japan’s Nikkei index plunging 6%, setting the stage for further losses on Wall Street. The situation was exacerbated by disappointing U.S. employment data, which failed to meet expectations and fueled panic.
As a result, Bitcoin lost nearly $5,000, falling through several key support levels, including the short-term holder cost basis. The resulting liquidations amounted to $230 million in long positions across the cryptocurrency market on August 1 and 2.
Michaël van de Poppe, founder and CEO of MNTrading, commented on the situation via X, noting the widespread panic and the market’s anticipation of a substantial recession in the U.S. He suggested that the recent events likely increased the chances of the Federal Reserve cutting interest rates at its next meeting in September, potentially benefiting crypto and other risk assets.
“One thing is for certain: Rate cuts for September are confirmed,” van de Poppe stated.
The Kobeissi Letter also highlighted the shifting expectations regarding the Fed’s next move. The focus has shifted from debating whether a rate cut would happen to discussing the magnitude of the cut, with a 25-basis-point reduction now appearing more likely.
Global Liquidity: A Bullish Case for Bitcoin
Despite the market turmoil, some analysts maintained a bullish outlook for Bitcoin. Jeff Ross, founder and managing director of Vailshire Partners, pointed to the increasing global M2 money supply as a positive factor for BTC’s future price action. Ross shared a chart on X comparing the global M2 money supply with BTC/USD and its 50-week and 200-week simple moving averages (SMAs).
He suggested that a “reverse head-and-shoulders” pattern might be forming for Bitcoin on the weekly chart, which, combined with rising global liquidity, could be highly bullish from both a technical analysis (TA) and liquidity perspective.
