Panic affects the market, Bitcoin falls to $53,000, Ethereum will turn negative in 2024

The cryptocurrency market experienced a sharp sell-off over the weekend, with Bitcoin falling to its lowest point since February and Ethereum hitting a new low since December. In the past 24 hours, Bitcoin fell 12%, Ethereum fell 21%, and the CoinDesk 20 index fell 12%. This wave of pullback may be due to the Bank of Japan's interest rate hike, which led to the appreciation of the yen and a sharp drop in the Nikkei index. The turmoil in the Japanese market affected the United States, and the Nasdaq also fell more than 5% last weekend. The Fed's policy failed to stabilize the market, and traders expect a 100% chance of a rate cut in September.

The widespread sell-off of cryptocurrencies over the weekend accelerated on Sunday night in the United States, causing Bitcoin {{BTC}} to fall to its lowest level since February and Ethereum {{ETH}} to its lowest price since December.

Bitcoin fell 12% in the past 24 hours and 20% compared to last week. Ethereum {{ETH}} has lost 21% in the past 24 hours and 30% in the past week, having given up all of its year-to-date gains and is down about 3% since Jan. 1.

The broader CoinDesk 20 index is down 12% in the past 24 hours.

The trigger for the current massive correction in crypto and traditional markets may be the Bank of Japan, which raised its benchmark interest rate last week. The monetary tightening caused the yen to surge and the country's Nikkei index to plummet. The Nikkei fell another 6% in early trading Monday, down about 15% in the past three trading days and 20% from its mid-July high.

The Japanese move spread to the U.S., with the Nasdaq falling more than 5% in the last two trading days of the week. Nasdaq futures fell 2.5% on Sunday night.

In addition to the Bank of Japan's unexpectedly hawkish stance last week, the Federal Reserve's move was also surprising - instead of keeping interest rates steady, it seemed somewhat ambivalent about a September rate cut, which almost all market participants believed was a certainty.

Whether the Fed has made a policy mistake remains to be seen, but markets are currently setting their own agenda. Traders have priced in a 100% chance of a September cut in the U.S. benchmark interest rate, a 71% chance of a 50 basis point cut and just a 29% chance of a 25 basis point cut.