The crypto market is experiencing a significant crash today, extending the ongoing meltdown amid a correction in Bitcoin prices. The sudden sell-off in Bitcoin during Asian trading hours has raised concerns about a potential drop below the $58,000 mark. Traders are facing liquidation as the volatility intensifies, despite indications from the US Federal Reserve that rate cuts may occur in September.
This turbulent environment in the crypto market coincides with increasing volatility ahead of Nvidia’s earnings report, while US stock market index futures are showing little movement. Investors are keenly awaiting Nvidia’s strong Q2 earnings report, which could trigger an uptrend in both stock prices and AI-related cryptocurrencies. The anticipation of positive results from Nvidia is contributing to a cautious optimism among investors in various sectors.
As the situation unfolds, the correlation between the stock market and the crypto market becomes increasingly evident. Nvidia’s stock price has risen by 0.42%, reaching $127.77 during premarket trading hours, indicating that strong performance in the tech sector could have ripple effects across financial markets. Investors are watching closely to see how the earnings report impacts not only Nvidia but also the broader market dynamics, particularly in relation to cryptocurrencies.
The interplay between traditional markets and the crypto landscape is becoming more pronounced, with both sectors responding to external economic factors. As the crypto market grapples with the current downturn, the upcoming Nvidia earnings report may serve as a pivotal moment, potentially influencing investor sentiment and trading behavior in both the stock and crypto markets.
Here’s Why Crypto Market Is Crashing Today
The crypto market cap has fallen to $2.06 trillion today, driven by market trends, technical chart weaknesses, and macroeconomic factors. Although there was a slight rebound during U.S. trading hours, investor uncertainty persists.
Recent data from CoinGlass reveals that nearly 87,000 traders experienced liquidation within the last 24 hours, resulting in a total liquidation of approximately $320 million. Of this amount, nearly $260 million came from long positions, while around $60 million was attributed to short positions. This significant level of liquidation highlights the ongoing volatility in the crypto market, as traders react to rapid price changes and shifting market sentiment. The combination of technical challenges and broader economic influences continues to create a challenging environment for investors, emphasizing the need for caution in navigating the current landscape.
Binance Faced Backlash on Reports Seized Assets
Binance faced backlash after reports alleged the exchange of seizing crypto assets from Palestinians. Crypto prices immediately fell after the centralized exchange was rumored to seize users’ crypto assets and block accounts on the order of the government.
However, Binance co-founder Yi He has refuted the allegations and revealed that only user accounts linked to illicit funds were blocked to comply with anti-money laundering laws. The crypto market rebounded slightly after Binance denied seizing crypto assets from accounts linked to Palestinians. The market is currently flashing signs of recovery, with a potential rally in the coming weeks.
Bitcoin Price Breaks Below Trendline On Liquidity Issue
Matrixport reported that Bitcoin dropped sharply amid long liquidations likely due to low liquidity. Traders who went long after the US Federal Reserve Chair Jerome Powell signed rate cuts were liquidated. The crypto market research firm asserts that concerns will mount if Bitcoin fails to rebound over $59,000.
BTC price broke below the ascending trendline, which triggered a broader market-wide selloff. The key support level is at $58,000. If the price breaks below, it may drop to the next psychological level at $55,000.
Bitcoin needs to rebound above $63,000 for confirmation of a bullish upcoming momentum. As per Fib retracement, the price is likely to rally and many traders expected a drop after the BTC price hit $65,000. Traders can expect resistance at the $61,300-$61-500 range.
Macroeconomic Factors and Upcoming Monthly Crypto Market Expiry
The crypto market is set for a monthly expiry on August 30, with Bitcoin options valued at $3.65 billion and Ethereum options worth $1.35 billion expiring on the largest derivatives exchange, Deribit. This expiry could lead to significant market activity as traders adjust their positions.
Additionally, the U.S. Bureau of Economic Analysis is scheduled to release the US PCE inflation data, which is expected to show a decrease to 2.5% for August. The market anticipates that the annual PCE and core PCE inflation rates will come in higher, projected at 2.6% and 2.7%, representing a 0.1% increase for both metrics. These inflation figures will likely influence market sentiment, particularly in the crypto space, as traders respond to economic indicators alongside the forthcoming expiry of options contracts.
