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Bitcoin's price has stumbled at the start of the week, dropping 6.5% over the past seven days and continuing its decline on September 3. The downturn coincided with a sharp sell-off in equities markets, where the DOW fell by 1.2%, the S&P 500 decreased by 1.3%, and the Nasdaq Composite slid 1.8%. This sell-off was partly attributed to recent comments from the Bank of Japan (BoJ), which reignited concerns about the global economy.
The Bank of Japan’s recent statements have stirred market unease. In a submission to a government panel led by outgoing Prime Minister Fumio Kishida, BoJ Governor Kazuo Ueda indicated that the central bank might implement further interest rate hikes if economic conditions and price levels align with expectations. This statement led to the Japanese yen strengthening against the US dollar, with the USD/JPY pair briefly dipping to 145.1 from a high of 147.2.
Following these developments, {Bitcoin} (BTC) experienced a significant decline. The cryptocurrency lost $1,700 within two hours of the Wall Street opening on September 3, hitting an intraday low of $57,556, according to Cointelegraph Markets Pro and TradingView data. This reaction echoed the market’s response in late July when the BoJ's decision to raise borrowing costs triggered a sell-off in risk assets, including Bitcoin.
In addition to macroeconomic factors, retail interest in Bitcoin has waned. The cryptocurrency has not sparked significant investor enthusiasm since falling from its peak of $73,835. Data from popular crypto commentator Lark Davis and Google Trends reflect a steep drop in retail demand and search interest, which has remained low since May 2024.
Despite the recent downturn, Bitcoin's current price remains within a broad range of $50,000 to $70,000. Onchain data indicates that Bitcoin is trading near its fair value, suggesting it is well-aligned with its underlying economic fundamentals. Meanwhile, VanEck, a New York-based wealth management firm, maintains an optimistic outlook for Bitcoin’s future, despite the current market challenges.
