The cryptocurrency market is feeling the pressure as it follows the downturn in US stocks, specifically the Nasdaq 100. With Nvidia’s upcoming earnings report in focus, the correlation between the crypto market and the Nasdaq 100 is becoming more apparent, causing concern for bullish investors.
Nvidia's slower growth impacts both Nasdaq and crypto
Market expectations for Nvidia are high, with analysts predicting second-quarter earnings of about 65 cents per share and revenue of $28.74 billion. While this represents significant growth compared to the same period last year, it also marks a slowdown from the company’s explosive growth earlier in 2023. This uncertainty has led to volatility in Nvidia's stock and, by extension, the Nasdaq 100. Given the crypto market's positive correlation with the Nasdaq 100, cryptocurrencies have also seen declines.
Long liquidations exceed shorts, accelerating market downturn
Over the past 24 hours, the crypto market has seen $143.70 million in liquidations, with $126.34 million coming from long positions. This indicates that many traders were overly optimistic and leveraged. As prices fall, these long positions are forced to liquidate, creating a domino effect that accelerates the downward trend. Additionally, a 1.80% decrease in open interest for crypto futures suggests traders are closing positions and stepping back from the market.
Despite the sell-off, funding rates for major cryptocurrencies like Bitcoin and Ether remain positive, suggesting a lingering bullish sentiment among traders still active in the market.
Technical factors contributing to the pullback
The current decline is part of a broader technical pullback, as the market hits resistance at the upper trendline of its descending channel pattern—a trend seen in previous months. As of August 27, the total crypto market cap is breaking below its 200-day EMA, signaling potential further declines toward the $1.80-1.72 trillion range.
Stay updated with the latest in crypto market news and trends, and keep an eye on key technical levels for potential opportunities.