This sharp decline in crypto assets occurred against a backdrop of faltering equities performance. The S&P 500 dropped by up to 4.4% in the same period.
The sell-off was driven by weak employment data, slow tech growth, and renewed recession fears. What happened to the crypto market lately?
Sell-Off Driven by Economic Weakness and Recession Fears
Several high-profile companies have reported disappointing second-quarter results, contributing to the market’s turbulence. Microsoft and Intel posted earnings below expectations, while Nvidia, a key player in the tech sector, faced substantial declines. Nvidia’s struggles have been exacerbated by growing speculation about impending rate cuts in September. This can lead to a capital shift back into smaller, lagging companies.
The crypto market, reflecting broader economic uncertainties, has seen dramatic price drops. On August 5th, BTC plunged by as much as 8.8%, while ETH fell by 15% in the last 24 hours. Over the past week, BTC and ETH have experienced declines of 20% and 27%, respectively. SOL has been the hardest hit among the top 10 cryptos by market cap, with a 30% drop since July 30. Here is how the total crypto marketcap has decreased in the last 3 months:
Source: Coingecko
The market turmoil has also been influenced by a significant sell-off from Jump Crypto, a major trading firm.
More About the Current Status of the Crypto Market
According to Arkham Intelligence data, Jump Crypto has liquidated hundreds of millions of dollars in assets over the past few days, exacerbating the downward pressure on the market.
Source: X
The Crypto Fear & Greed Index, which measures market sentiment towards Bitcoin and cryptocurrencies, has also fallen into the “fear” zone. As of the latest update, the index stands at a score of 26, reflecting widespread apprehension among investors.
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