Bitcoin falls slightly on recession fears

The increase in job cuts in the US and economic uncertainty generate volatility in the cryptocurrency market.

The price of bitcoin (BTC) closed with a slight drop of 0.74%, standing at $89,931, due to fears of a possible economic recession driven by the increase in job cuts in the United States. Data from Challenger Job Cuts revealed that layoffs reached 172,017 in February, the highest figure since the COVID-19 pandemic in 2020. This scenario generated uncertainty in the markets, affecting both the dollar and risk assets, including cryptocurrencies.

The 100-period exponential moving average, located at $92,900, acted as a ceiling for the price. / Tradingview

Job cuts and their impact on the economy

Job cuts in the US are driven by several causes:
Actions by the Department of Government Efficiency: Optimization measures that have led to massive layoffs in the public sector. Cancellation of government contracts: The reduction in public spending affects companies dependent on these contracts.
Fear of trade wars: Geopolitical uncertainty slows investment and business growth.
Business bankruptcies: Vulnerable sectors are contributing to job losses.

This panorama generates concern in the markets, especially in risk assets such as bitcoin, which are usually sensitive to negative economic indicators.

Bitcoin in an indecisive market

The Bitcoin market showed volatility this Thursday, with a price that fluctuated between key resistances and supports:
Dynamic resistance: The 100-period exponential moving average, located at $92,900, acted as a ceiling for the price.
Dynamic support: The 200-period exponential moving average, at $85,800, keeps the BTC price above this level.

Additionally, open interest in Bitcoin futures fell 2.11% over the past 24 hours, closing at $48.83 billion. This reflects a reduction in risk appetite in the derivatives market.

Bitcoin ETFs: Moderate Flows

In the Bitcoin ETF market, activity has been moderate:
Net negative flows: Since last Monday, outflows of $279.3 million were recorded.
Recovery in capitalization: Despite the outflows, the market capitalization of Bitcoin ETFs recovered to $103.32 billion, after falling to $98.12 billion at the end of February.

In the spot market, a capital inflow of $39.20 million was observed in the past 24 hours, suggesting that some investors are taking advantage of low prices to accumulate BTC.

The increase in job cuts and economic uncertainty tested the resilience of bitcoin and other risk assets, due to a possible recession. As investors monitor Fed decisions and geopolitical developments, the cryptocurrency market could remain volatile in the short term. However, in the medium term, stimulus measures could offer some respite and open up new opportunities.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and involve risk. Please do your research before investing.