Why is the crypto market down today?
Today, the cryptocurrency market’s losses mirror extreme selloffs across the global equity market, which have already caused over $1 billion in liquidations.
On Aug. 5, the market capitalization of all crypto assets combined plunged by up to 15.80% to its six-month low of $1.694 trillion. Leading the losses were Bitcoin
BTC
tickers down
$50,171
and Ether
ETH
tickers down
$2,234
, which together control over 70% of the overall crypto market share.
However, on July 31, the Bank of Japan (BOJ) increased its interest rate to 0.25%, raising speculation of further hikes among traders. In contrast, the US Federal Reserve will likely start cutting interest rates in September due to rising unemployment and slower economic growth.
As a result, the yen surged to its best levels versus the dollar since January 2024. This rapid appreciation has disrupted the profitability of the carry trade from the yen to the dollar.
Over $1 billion in crypto liquidations
The crypto market decline has picked up momentum further due to $1.08 billion of liquidations in the last 24 hours, of which $919.54 million are longs. Meanwhile, the crypto futures market’s open interest (OI) has dropped by approximately 15% in the same period.
#BTCMarketPanic #RecessionOrDip?
