Crypto Market Crash: Here’s Why BTC, ETH, And Other Altcoins Are Falling
The recent crypto market crash has fueled fresh concerns among investors, especially after the recent US Job data cemented bets over a potential 0.5% rate cut by the US Fed. The US stock market has also noted gloomy trading today, while the crypto sector also moves in tandem with it.
With the recent slump in prices, the market watchers are looking for potential reasons behind the recent dip. So, let’s take a quick tour of all the possible factors that may have contributed to the recent bearish trend in the market.
Reasons Behind The Recent Crypto Market Crash
US Job Data Sparks Volatility
The recent US nonfarm payroll data showed that the US has added fewer jobs than Wall Street expectations. In addition, the unemployment rate also stayed at 4.2%, which appeared to have fueled optimism among investors initially.
However, soon after the data, the market witnessed massive selling pressure, as witnessed by the recent performance of the US stock market. In addition, the latest crypto market crash is also likely to be attributed to the job data, which has caused immense volatility in the broader financial market.
Recession Fears Fuel Crypto Market Crash
The latest job data has also spooked investors, with many market pundits anticipating a possible US recession. Chicago Fed President Austan Goolsbee has recently hinted towards a potential recession, sparking market concerns.
This development might have weighed on the traders’ sentiment, potentially causing a massive dip in the broader financial market. However, it’s worth noting that several market experts see Bitcoin and other crypto as a hedge against economic woes. Having said that, it is expected that the market will soon regain its momentum.
For context, a recent Morningstar report, citing Vetle Lunde, senior analyst at crypto research firm K33 Research, suggests that a recession is potentially bullish for Bitcoin in the long term. The analysis notes that investors seek scarce assets like bitcoin and gold in times of economic turmoils. This contrasting outlook highlights the intricate interplay between macroeconomics and cryptocurrency markets, suggesting Bitcoin’s resilience may ultimately prevail.
Stock Market Dip
The US equity market bleeds today, with all three stock indices ending the session in red. According to the latest data, the DJIA closed at 1.01% down, while the Nasdaq and S&P 500 noted a plunge of 2.55% and 1.73%, respectively.
Meanwhile, according to several market experts, the crypto market tends to move in tandem with the US stock market. In a recent report, Citi analysts said that the stock market is highly correlated with the stocks, especially amid the macroeconomic woes and other uncertainties.
Having said that, the recent US stock market performance also reflects the waning risk-bet appetite of the investors towards risk-bet assets, which might have contributed to the recent crypto market crash.
Crypto Market Crash; Why BTC, ETH, & Others Are Falling?
The AI Coins was one of the worst performing sectors today, following a dip of over 4% in NVDA stock. The Nvidia stock price closed at $102.83, down 4.09% on Friday, while noting a further decline in the after-hours trading session.
In addition, BTC price was down 5.07% to $52,893, with its trading volume soaring 58% to $49.02 billion. Simultaneously, ETH price plunged nearly 7% to $2,217, while its trading volume rocketed 88% to $25.56 billion.
According to the latest sentiments, the top altcoins tend to follow Bitcoin’s performance. Considering that, the investors appear to be staying on the sideline after the recent topsy-turvy scenario noted in BTC price.
Additionally, experts like Peter Brandt predicted a Bitcoin crash to $46,000, which has further dampened the market sentiment. However, market pundits expect the economic concerns to create short-term pressure on the crypto market, while remaining bullish in the long run.
The post Crypto Market Crash: Here’s Why BTC, ETH, And Other Altcoins Are Falling appeared first on CoinGape.