Analysts are predicting the Federal Reserve will react to the market downturn by cutting interest rates this month. This move, they suggest, is aimed at preventing the ongoing decline in asset prices from spreading to the real economy and triggering a recession.

The ongoing market crash, according to analysts, was triggered by a combination of factors, including Japan’s recent interest rate hike and relatively weak U.S. economic data. These events exposed significant global imbalances that had accumulated at extreme levels, further exacerbated by growing geopolitical tensions.

The cryptocurrency sector hasn’t escaped the carnage, experiencing a significant decline over the past ten days. Bitcoin, in particular, continued its downward spiral after closing below the key $60,000 level on Sunday.

A few hours into the new week, the flagship crypto declined a further 14.75%, dropping below $50,000 to reach $49,647 early Monday morning, according to data from TradingView. Bitcoin dragged other cryptocurrencies along, with Ethereum declining to $2,116, as the total crypto market capitalization fell below $2 trillion to reach $1.694 trillion for the first time since February.

The U.S. government released a disappointing employment rate figure last Friday. The non-farm payroll figure, projected to be a downwardly revised 179,000 in June, came out as 114,000, triggering recession fears. However, analysts insist the figure is not a harbinger of recession. Most of them also believe the triggering of the Sahm Rule only succeeded in diverting attention from the already-mentioned increasing geopolitical tensions.
Bitcoin traded for $51,007 at the time of writing, with bearish momentum becoming increasingly evident across the crypto market. However, the flagship crypto’s position as a store of value remains intact while the bulls struggle to maintain its price above the $50,000 psychological support.