The cryptocurrency market has been experiencing turbulence lately, leading to questions about the recent downward trend. Here, we’ll explore the reasons behind the fall in cryptocurrency prices and what industry experts are forecasting for the future.
Current Market Overview
In the last 24 hours, the global cryptocurrency market cap has declined by 5.3%, bringing it down to approximately $2.07 trillion — a level not seen in months. Alongside this drop, the trading volume for cryptocurrencies laid at around $86.7 billion.
Among the top 100 cryptocurrencies by market capitalization, only five coins have managed to stay in the green. Notable gainers included Helium (HNT), which saw a rise of 3.4% to $7.55, and Bitcoin SV (BSV), which increased by 3.2% to $44.75. Other minor gains were experienced by Fasttoken (FTN) and Monero (XMR), both of which gained around 1% each.
Conversely, the most significant declines were recorded by Toncoin (TON) and Notcoin (NOT), falling by 11.4% and 11.3% to $4.59 and $0.007389, respectively. Overall, most top coins have seen declines, with Binance Coin (BNB) falling the steepest by 6.8%, now trading at $500.33.
Economic Factors Influencing Crypto Prices
The sharp market drop can be attributed to economic uncertainty in the U.S. The sell-off in tech stocks, particularly those related to Nvidia, is further contributing to the negative sentiment in the crypto market. Additionally, U.S. spot Bitcoin ETFs experienced substantial outflows, reaching a total of over $287 million — the largest outflow since May 2023.
Potential Bitcoin Decline and Market Volatility
According to analysts from Bitfinex, if the U.S. Federal Reserve reduces rates as anticipated, Bitcoin could plummet by 15%-20%, potentially hitting a low of about $40,000 in September. This prediction stems from Bitcoin’s positive correlation with traditional asset classes, suggesting that global economic conditions will have a lasting impact on its price.
September historically proves to be a volatile month for Bitcoin, with an average return of 4.78% and an average peak-to-trough decline of 24.6%. The analysts noted that while September can bring challenges, it also sometimes defies expectations, offering positive returns even following a downturn in August.
Long-Term Outlook in Light of Rate Cuts
Even amidst the current market pullback, many industry experts like Ryan Lee, Chief Analyst at Bitget, express that the implications of likely upcoming U.S. Federal rate cuts could lead to different investing sentiments. Lee asserts that the “sell the news” phenomenon seen in financial markets can lead to short-term declines.
However, unlike rate cuts that occurred during the 2007-2008 financial crisis, the current cuts are preventative measures aimed at averting economic slowdown, which could lead to less volatility and a potential long-term recovery in the market.
According to Lee, investors should adjust their strategies considering the broader context of rate cuts instead of solely focusing on immediate price fluctuations.
Everclear’s NEXT Token Updates
In recent news from the blockchain sector, Everclear, a clearing layer for Web3 projects, has announced an extension of the NEXT token lock-up period after discussions with its stakeholders. The earliest unlock date has been moved from September 6, 2024, to December 6, 2024, alongside an increase in the lock-up duration from 12 to 18 months.
Arjun Bhuptani, co-founder at Everclear, stated that this extension solidifies their long-term vision to stabilize their ecosystem and boost trust among participants. The initiative aims to provide better coordination of global liquidity settlement among modular blockchains, with plans to launch their mainnet soon.
For further updates and in-depth insights into the evolving cryptocurrency landscape, feel free to bookmark this page and subscribe to our newsletter!