Bitcoin fell below $56k amid US and Japanese stock market crashes

Bitcoin fell to its lowest level since early August on Wednesday morning on the Asian exchange after sharp losses in the US and Asian stock markets, sending some major stocks down nearly 10%.

BTC briefly fell to $55,500, its lowest level since Aug. 8, and wiped out nearly all of its gains over the past month. The broader market tracked by CoinDesk 20 (CD20), a liquid index that tracks the largest tokens by market capitalization, fell nearly 6%. The major tokens Solana (SOL) and ether (ETH) fell more than 7% in losses.

U.S. stocks tracked by the Nasdaq 100 and S&P 500 fell 3.5% on Tuesday to start the historically bearish month of September as weak manufacturing data revived fears of an economic slowdown. The movement spread to Asian markets as Japan's Nikkei fell more than 4 percent in the hours after the open, adding to the jolts from last month's yen trade wind-down.

The August reading of the Institute for Supply Management's manufacturing index fell for the fifth straight month, recovering from July but remaining below the 50 threshold. The index is a monthly gauge of the level of economic activity in the U.S. manufacturing sector and is considered a sign of the broader economy.