Bitfinex analysts suggest that Bitcoin might retest support around $48,900 as a potential local bottom following a drop in crypto markets below $2 trillion.

Bitcoin (BTC), the leading asset in the cryptocurrency market, could face lower levels as worldwide economic uncertainty has wiped out over $570 billion in digital asset value since the beginning of August. Analysts at Bitfinex indicate that without bullish momentum, Bitcoin could dip below $50,000 again.

During the recent downswing, BTC dominance reached 60%, indicating that Bitcoin accounted for the majority of the market and was the primary asset in the virtual currencies space. Consequently, further declines in BTC prices could lead to broader dips across the cryptocurrency ecosystem. The 24-hour decline in BTC has already triggered over $1.2 billion in crypto liquidations, according to CoinGlass.

Global recession concerns dragged BTC down to $49,000 during a historically challenging month for cryptocurrencies. On average, BTC has shed 7.8% and 5.5% in August and September, respectively, in previous years.

Bitfinex analysts emphasize that the recent drop was driven by macroeconomic factors, not by on-chain or technical reasons. They attribute the crash to the Bank of Japan’s carry trade crisis, a disappointing US employment report, and a rise in unemployment.

Despite starting August 5 with double-digit losses, Bitcoin managed to retrace nearly 50% to the upside, trading over $54,500 at the time of reporting. According to IntoTheBlock data, it is crucial for Bitcoin to gather strength between $47,800 and $57,800, depending on macroeconomic developments.

Looser monetary policies could also benefit BTC and cryptocurrencies. Experts, including Wharton professor Jeremy Siegel, have called for an emergency rate cut from the U.S. Federal Reserve in response to the ongoing global liquidity crisis.

For more updates and news on cryptocurrencies, investing, and finance, explore Global Crypto News.

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