Factors of Market Crypto Crash and Its Impact

Bittime – In recent days, the crypto market has been crashing. This of course makes many users panic because the majority of their portfolios are red. So, below we explain the factors behind the crypto market crash, complete with their impacts.

Read this article until the end.

ETH and BTC Affected by Market Crash

The cryptocurrency market, which had experienced an increase after a sharp decline on August 5 2024, is now experiencing selling pressure again. Major assets such as Bitcoin (BTC) and Ethereum (ETH) which previously managed to reach levels of $57,600 and $2,551, have now experienced significant price declines.

In the last 24 hours, BTC and ETH fell by 3.8% and 6% respectively. Previously, the market experienced strong optimism after the Deputy Governor of the Bank of Japan, Shinichi Uchida, stated that the central bank would not raise interest rates.

This statement provides stability to the market and supports both Japanese and US stocks.

Also Read: FTX and Alameda Research Required to Pay $12.7 Billion to Creditors

The Fed Must Lower Interest Rates

However, this optimism only lasted a short time. US stock indices such as the Nasdaq and S&P 500 decreased, respectively by 0.97% and 0.78%. The Dow Jones also fell by 0.6%. This drop has a direct impact on the cryptocurrency market.

Former president of the Federal Reserve Bank of New York, Bill Dudley, stated that the Fed needs to immediately make significant interest rate cuts. According to him, the increase in the unemployment rate to 4.13% indicates a potential recession. 

Dudley even suggested cutting interest rates by 150 basis points, perhaps even an additional 100 basis points to support the economy.

Meanwhile, JPMorgan CEO Jamie Dimon has a different view. He said that the Fed's interest rate cut would not have a big impact on the market.

These conflicting statements create uncertainty in financial markets, which ultimately has a negative impact on the prices of Bitcoin and Ethereum.

Impact of Stock Market Decline on Crypto

The cryptocurrency market, which had experienced a rebound, is now facing selling pressure again. The decline in Bitcoin and Ethereum prices occurred in line with a correction in the US stock market.

Initial optimism was fueled by the statement by the Deputy Governor of the Bank of Japan indicating there would be no increase in interest rates. However, market sentiment reversed after major US stock indexes such as the Nasdaq and S&P 500 experienced a decline.

Crypto Market Crash Factors

Several factors influenced this decline:

• Correlation with Stock Market: Crypto and stocks have an increasingly strong correlation, so that the movement of one market can affect the other.
• Economic Uncertainty: Federal Reserve officials' statements regarding the potential for lowering interest rates to overcome a recession created uncertainty in the market.
• Profit-Taking: After a significant price increase, some investors may choose to secure profits by selling their crypto assets.

Also Read: PacMoon Explosion Ecology Meme Project Starts on Solana

Impact of the Crypto Market Crash for Investors

A drop in price can cause losses for investors holding Bitcoin and Ethereum. However, this condition can also be an opportunity for long-term investors to buy assets at lower prices.

It is important for investors to have a mature investment strategy, including portfolio diversification and risk management. Understanding the factors that influence the market can help in making better investment decisions.

How to Buy Crypto on Bittime

You can buy and sell crypto assets easily and safely via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also ensure you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Study Complete Guide How to Buy Crypto on Bittime. 

Monitor graphic movement of Bitcoin (BTC) price, Ethereum (ETH), Solana (SOL), and other cryptos to find out today's crypto market trends in real-time on Bittime.