The price of Bitcoin slipped on Wednesday as investors gauged the impact of weaker US manufacturing activity data and a raft of key labor market figures this week that could influence a major upcoming Federal Reserve interest rate decision.
Sentiment was dampened by weaker-than-expected results from the Institute for Supply Management's monthly measure of US manufacturing activity, which stoked fears of a potential slowdown in the world's largest economy.
The growth concerns drove the steepest selloff in a month on Wall Street on Tuesday as US investors returned from their Labor Day holiday.
Meanwhile, the publication of the much-anticipated August nonfarm payrolls report on Friday is expected to play into how Fed Chair Jerome Powell approaches an expected shift away from a focus on taming inflation to preparations aimed at guarding against job losses. Powell said in August that the "time has come" to adjust monetary policy due to potential "downside risks" facing the US jobs picture.
Lower rates could bode well for cryptocurrencies, given that they free up more liquidity for speculative trade.
According to the CME's closely-monitored FedWatch Tool, analysts are all but convinced the Fed will roll out a 25-basis point reduction in borrowing costs at the central bank's upcoming two-day gathering from Sept. 17-18. Interest rates currently stand at a 23-year high of 5.25% to 5.5%.
Crypto prices today
By 05:48 ET (09:48 GMT), Bitcoin, the world's most widely-known cryptocurrency, had declined by 3.6% over the past 24 hours to $56,730.0, while no.2 digital token Ethereum had also shed 4.2% to $2,399.47.
In the wider crypto market, Solana moved 2.9% lower, XRP fell by 2.9%, and Cardano decreased by 2.9%. Dogecoin, meanwhile, dropped by 2.8%.
The global crypto market cap dipped below $2 trillion, declining by just under 3.6% over the last day, according to crypto price tracking website CoinMarketCap.
