- Total crypto market cap falls below $2T for the first time since 4th August global markets crash.
- Historical data suggests September is an ideal month for accumulation in anticipation of gains in October.
As a seasoned researcher with years of experience navigating the volatile world of cryptocurrencies, I find myself both intrigued and cautious as the total crypto market cap dips below $2 trillion for the first time since the global markets crash on 4th August. The eerie similarity between this week’s decline and the one in August is hard to ignore, especially given the BoJ’s hints at more interest rate hikes that have fueled fears about the health of the global economy.
As an analyst, I observed a notable dip in the value of Bitcoin, which fell beneath the $58,000 threshold on the 3rd of September, making it the fourth such occurrence in the past seven days when examining the BTC/USDT 4-hour chart
In August, Bitcoin’s performance was disappointing, causing a decline of 8.6% as reported by Coinglass. This negative trend, leaning towards falling prices, followed the modest gains achieved in July
On the morning of September 4th, the leading digital currency saw a continuation of its drop, reaching a low of $55,673 on Binance. This downtrend seems to have been influenced by a ripple effect stemming from significant losses in U.S. and Asian stock markets
“Seven impressive stocks have collectively lost approximately $550 billion in market value today. Specifically, Nvidia ($NVDA) is heading towards its most significant one-day decline since the year 2024, as reported by Kobeissi Letter.”
At its lowest point during the downturn, the overall cryptocurrency market dipped below $2 trillion for the first time since August 4th
The widespread market downturn is linked to remarks made by the Governor of the Bank of Japan (BoJ), suggesting potential increases in interest rates, sparking concerns about the stability of the world’s economic condition once again
Hauntingly identical crypto market decline
This week’s decline in both cryptocurrency and stock markets resembles the worldwide market drop in early August, which was caused by a similar fear following the Bank of Japan increasing their key lending rate at the end of July
It’s worth noting that although the market is experiencing a downturn, the Crypto Fear & Greed Index has climbed to 27 today from its initial 26 points over the first three days of this month, suggesting a slight increase in optimism among crypto investors
Despite the fact that September has traditionally been Bitcoin’s weakest month, with an average decline of 4.5%, investors remain optimistic and are placing their bets on a resurgence of bullish market movements characterized by increased volatility
Macro volatility: BoJ, Federal Reserve interest rate decisions
This month, a new batch of American economic reports will surface, beginning with the August nonfarm payrolls report scheduled for release on September 6th. These figures could either bolster or challenge the current perspective that the U.S. economy is decelerating
In early August, the Non-Farm Payroll (NFP) report for July indicated an increase in the United States’ unemployment rate, moving from 4.1% to 4.3%. This upward trend placed a negative influence on international financial markets
Keeping an eye on the Bank of Japan’s policy decisions is another significant factor outside the U.S. Their decision to raise interest rates in late July, coupled with a weak jobs report from the U.S. in July, sparked worries that the Federal Reserve might be slow to reduce interest rates, which could negatively impact risky investments in early August
As a result, during his speech on the U.S. economic forecast on August 23rd, the Federal Reserve Chair emphasized that it was now appropriate to make changes in our policies
Anticipation is high for a reduction of 0.25% (or 25 basis points) in interest rates during the Federal Open Market Committee (FOMC) meeting on September 18th. If this prediction comes true, it could create a potentially advantageous monetary climate for riskier investments such as cryptocurrencies
Read Bitcoin’s [BTC] Price Prediction 2024–2025
In other words, if the job market in the U.S. during August shows signs of weakness, it could prompt a substantial rate reduction of half a percentage point. This move might amplify fears of a recession and potentially trigger a market adjustment
Alternatively, a robust report might significantly impact the Federal Reserve’s choice regarding initiating interest rate reductions. However, both scenarios provide opportunities for market turbulence
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2024-09-04 20:14