As a seasoned crypto investor with over a decade of experience in this dynamic market, I must admit that the recent bearish trend is nothing new to me. However, the sheer magnitude and rapidity of these declines have left even the most hardened investors like myself feeling a tad uneasy. The cascading selloffs across major stocks and crypto assets, including Bitcoin, are reminiscent of the rollercoaster ride we experienced in 2018.
In the last 24 hours, the crypto market showed a bearish trend, with Bitcoin (BTC) dropping approximately 4% and dipping below $56K – this is the lowest it’s been since its crash on August 5. Meanwhile, the altcoin sector also experienced substantial losses, causing around $200 million worth of leveraged trading positions to be liquidated.
Due to recent trends, it appears that concerns about another cryptocurrency sell-off in September may be warranted. This is because the Bitcoin Fear & Greed Index stays below 30%, suggesting that the market sentiment is dominated by fear, with investors seemingly giving way to the bears.
Crypto Asset Tumbled in Tandem with Major Stocks
2024 saw the crypto market significantly affected by the substantial selloff within the stock sector, resulting in approximately $1 trillion in total losses. In just the last 24 hours, the S&P 500 experienced one of its three worst trading days this year, following a 2.12% drop.
A significant drop occurred in well-known stock markets such as the Asia Dow, Japan’s Nikkei 225, the Nasdaq Composite Index, and the Dow Jones Industrial Average Index.
The US Department of Justice (DOJ) served Nvidia Corporation (NASDAQ: NVDA) with a subpoena as part of their antitrust inquiries. Consequently, the NVDA stock ended Tuesday’s trading at $108, marking a drop of more than 9 percent from its opening price, which equates to a loss exceeding $280 billion in market value.
AI Crypto Projects Heavily Impacted
Over the past day, the value of AI-focused cryptocurrency projects decreased substantially due to a series of setbacks in the semiconductor stock sector. As per recent market statistics, the cumulative market capitalization for leading AI crypto projects fell by approximately 7 percent, now standing around $20 billion.
In the last 24 hours, some of the leading AI-focused cryptocurrency projects have experienced significant losses. These include NEAR Protocol (NEAR), Internet Computer (ICP), Artificial Superintelligence Alliance (FET), Render (RENDER), and Bittensor (TAO).
Bigger Market Picture
As an analyst, I foresee the cryptocurrency market facing continued downturn in the approaching weeks, given the significant exodus of investors from high-risk assets. Evidence of this trend can be observed in the recent net redemptions of both US spot Bitcoin and Ether Exchange Traded Funds (ETFs) over the past few days.
On Tuesday, U.S. Bitcoin ETFs collectively saw an outflow of approximately $287 million, with Fidelity’s FBTC leading the way. Notably, none of the U.S. spot Bitcoin ETFs, including BlackRock’s IBIT, experienced a net cash inflow on this day. This marks the fifth straight day that these ETFs have recorded significant outflows of capital.
Currently, there’s been little interest from big investors in U.S. Ether Exchange-Traded Funds (ETFs), as they reported an outflow of approximately $47 million earlier this week.
Looking at a two-month chart for Bitcoin, the TD Sequential indicator has suggested a potential sell-off due to a detected correction. Should the support at $51,000 be breached, we might see Bitcoin’s price fall towards $40,600.
— Ali (@ali_charts) September 4, 2024
Concurrently, it’s anticipated that the Fed’s predicted interest rate reduction on September 18 might trigger a “sell-the-news” reaction before the broader market recovers in Q4. Under these circumstances, the price of Bitcoin could potentially decrease towards $54K or even lower, contingent on short-term investor sentiment.
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2024-09-04 12:13