Why is the Crypto Market Down Today?
The global cryptocurrency market has seen a sharp decline over the past 24 hours, with the total market capitalization falling by 5.3% to $2.07 trillion, the lowest it’s been in months. The trading volume over the last day reached $86.7 billion, indicating significant market activity.
Among the top 100 cryptocurrencies by market cap, only a handful managed to stay in the green. Helium (HNT) rose by 3.4% to $7.55, Bitcoin SV (BSV) increased by 3.2% to $44.75, while Fasttoken (FTN), Monero (XMR), and Starknet (STRK) saw modest gains of around 1%. However, the majority of coins were in the red, with Toncoin (TON) and Notcoin (NOT) leading the losses, down by 11.4% and 11.3%, respectively.
None of the top 10 cryptocurrencies were immune to the downturn. Binance Coin (BNB) took the biggest hit, dropping 6.8% to $500.33, while TRON (TRX) experienced the smallest decline of 1.7%, trading at $0.14995. Bitcoin (BTC) fell by 4.5% to $56,527, and Ethereum (ETH) decreased by 4.7% to $2,393.
This market decline coincides with broader economic uncertainties in the U.S., a sell-off in tech stocks led by Nvidia, and significant outflows from U.S. spot Bitcoin exchange-traded funds (ETFs), which saw $287.78 million withdrawn—the largest since May 1.
Bitcoin Could Drop to $40K if Fed Cuts Rates in September, Warn Analysts
According to a recent Bitfinex Alpha Market Report, Bitcoin could see a 15%-20% decline, potentially dropping to around $40,000 this month if the U.S. Federal Reserve proceeds with anticipated rate cuts. The report highlights Bitcoin’s historical volatility in September, with an average return of 4.78% and a typical peak-to-trough decline of 24.6%.
The report suggests that a rate cut could exacerbate Bitcoin’s volatility, particularly if global economic conditions continue to influence traditional asset classes. However, it also notes that September has occasionally defied bearish expectations when August ends in the red, offering a potential silver lining.
Long-Term Outlook: A Rate Cut May Benefit the Market
Ryan Lee, Chief Analyst at Bitget, echoed the Bitfinex analysts’ views, noting that the “sell the news” effect is common in financial markets, leading to short-term declines following positive developments. However, Lee emphasized that the current rate cuts are more preemptive, aimed at preventing economic slowdowns rather than responding to an existing crisis.
This difference, he argues, could result in a milder market reaction, with the potential for recovery and long-term benefits from a more accommodative monetary policy. Lee advises investors to consider this context when planning their strategies, rather than focusing solely on short-term price fluctuations.
Everclear Extends NEXT Token Lock-Up to Align Community Post-Rebrand
In other news, Everclear, a Clearing Layer for Web3, has announced an adjustment to the unlock schedule for its NEXT token. The lock-up period for tokens held by Proxima Labs, the Foundation, backers, and other contributors has been extended, with the earliest unlock date now set for December 6, 2024, instead of September 6, 2024.
The unlock period has also been extended from 12 to 18 months, concluding on June 6, 2026. This decision, made after thorough discussions with stakeholders, aims to ensure long-term alignment and stability within the ecosystem as Everclear builds the foundational elements of the Chain Abstraction stack.
The Everclear team is focused on solving fragmentation for modular blockchains by coordinating global liquidity settlement between chains. Currently in the testnet phase, the mainnet launch is expected in the coming weeks, marking a significant milestone in their development.
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