Ethereum

Long

Bitcoin

<p>The selling pressure on the crypto market continues accelerating in the first week of August. Initiated with the Bitcoin price reversal from $70,000, the bears took advantage of the market’s fear, uncertainty, and doubt (FUD) around geopolitical tension in the Middle East and fears of recession. This renewed sell pressure triggered a fresh correction in sentiment in most major altcoins as Ethereum dipped below $3000 on Friday. Here are five reasons behind today’s crypto market crash.</p> 
<h2 id="1-disappointing-nonfarm-payrolls-data">1. Disappointing Nonfarm Payrolls Data</h2> 
<p>The latest <a href="https://coingape.com/bitcoin-reclaims-64k-as-us-job-data-teases-fed-dovish-stance/" target="_blank" rel="noopener">U.S. nonfarm payrolls</a> report revealed that only 114,000 jobs were added in July, significantly below the anticipated figures. Additionally, the unemployment rate unexpectedly rose to 4.3%, marking its fourth consecutive increase.</p> 
<p>According to BlackRock’s Jeffrey Rosenberg, “The reaction here is probably the right reaction. We’ve had a string of disappointing data, and that’s pushing more concerns about the economic outlook.” The weaker-than-expected jobs data has stoked fears of a slowdown, impacting risk assets, including cryptocurrencies.</p> 
<h2 id="2-rising-recession-fears">2. Rising Recession Fears</h2> 
<p>The weak jobs report has intensified recession fears, with economist <a href="https://coingape.com/ethereum-going-to-2k-says-peter-schiff-altcoins-bleed-amid-us-recession-fears/" target="_blank" rel="noopener">Peter Schiff</a> amplifying these concerns. Schiff argued, “Rate cuts will fail to revive the economy or employment, but they’ll heat up already hot inflation. This isn’t your father’s stagflation. It’s much worse!”</p> 
<p>His comments highlight fears that the Federal Reserve’s potential rate cuts might not prevent a recession and could instead accelerate inflation. These concerns fuel broader market volatility and catalyzed today’s crypto market crash.</p> 
<p>Furthermore, Schiff criticized the poor performance of Spot Ethereum ETFs as these investment products continued outflows. He also predicted that at this rate, the ETH price would be back at the $2,000 level. Currently, ETH is barely holding above $3,000.</p> 
<p><strong>Also Read:&nbsp;<a href="https://coingape.com/bitcoin-crypto-cheques-to-clear-35t-us-debt-donald-trump-says/" target="_blank" rel="noopener">Bitcoin &amp; Crypto Cheques To Clear $35T US Debt, Donald Trump Says</a></strong></p> 
<h2 id="3-bitcoin-long-liquidations">3. Bitcoin Long Liquidations</h2> 
<p>The cryptocurrency market has seen a surge in long liquidations over the past 24 hours. Approximately $241.07 million worth of long positions were liquidated, accounting for 90% of total market liquidations. This large-scale unwinding of positions has intensified the downward pressure on crypto prices.</p> 
<figure id="attachment_210870" aria-describedby="caption-attachment-210870" style="width: 100%" class="wp-caption aligncenter">
 <img decoding="async" class="wp-image-210870 size-large" src="https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-1224x357.png" alt="Bitcoin Crash Leading to Crypto Market Liquidations" width="1224" height="357" srcset="https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-1224x357.png 1224w, https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-300x87.png 300w, https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-768x224.png 768w, https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-1536x448.png 1536w, https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-2048x597.png 2048w, https://coingape.com/wp-content/uploads/2024/08/Screenshot-2024-08-03-at-3.51.30 PM-150x44.png 150w" sizes="(max-width: 1224px) 100vw, 1224px">
 <figcaption id="caption-attachment-210870" class="wp-caption-text">
  Source: Coinglass
 </figcaption>
</figure> 
<p>In addition, <a href="https://coingape.com/markets/bitcoin-crashes-amid-recession-fears-should-you-buy-the-dips/" target="_blank" rel="noopener">BTC price crash</a>, from $65,000 to $60,000, reflects this significant liquidation impact. Coinglass data also revealed that the 14% drop in BTC price over the past five days also resulted in around $1 billion worth of long positions being liquidated.</p> 
<h2 id="4-stock-market-decline">4. Stock Market Decline</h2> 
<p>The broader stock market decline has further weighed on the crypto market crash. On Friday, August 2, stocks fell sharply as the weaker-than-anticipated jobs report ignited worries of an economic downturn. The broad market index plunged 1.84% to end at 5,346.56. In addition, the</p> 
<p>Nasdaq Composite lost 2.43%, closing at 16,776.16. This brings its decline from a recent all-time high to over 10%. Furthermore, the Dow Jones Industrial Average lost 610.71 points, or 1.51%, finishing at 39,737.26, with the index plunging as much as 989 points at its session low. This stock market decline has potentially spilled over into the crypto market.</p> 
<h2 id="5-bitcoin-ethereum-etf-outflows">5. Bitcoin &amp; Ethereum ETF Outflows</h2> 
<p>Both Bitcoin and Ethereum ETFs have faced significant outflows, contributing to the market’s woes. <a href="https://coingape.com/bitcoin-buy-the-dip-interest-wanes-amid-50k-calls-btc-etf-outflows-surge/" target="_blank" rel="noopener">Bitcoin ETFs</a> saw $237.4 million in outflows on August 2, with a weekly total of $80.4 million. Meanwhile, Ethereum ETFs experienced outflows totaling $54.3 million for the day and $169.4 million for the week.</p> 
<p>Grayscale’s ETHE saw $61.4 million in outflows on Friday. These negative ETF flows, coupled with&nbsp;<a href="https://coingape.com/genesis-moves-1-5-bln-for-creditor-repayment/" target="_blank" rel="noopener">Genesis Trading</a>’s bankruptcy repayments in BTC and ETH, may have exacerbated the crypto market crash.</p> 
<p><strong>Also Read:&nbsp;<a href="https://coingape.com/nvidia-beats-bitcoin-risk-adjusted-returns/" target="_blank" rel="noopener">Nvidia Beats Bitcoin In Risk-Adjusted Returns, Trend To Continue?</a></strong></p> 
<p>The post <a href="https://coingape.com/crypto-market-crash-5-reasons-why-bitcoin-altcoins-dropping-today/">Crypto Market Crash: What’s Driving Bitcoin &amp; Altcoins Decline? 5 Key Insights</a> appeared first on <a href="https://coingape.com">CoinGape</a>.</p>

Crypto Market Crash: What’s Driving Bitcoin & Altcoins Decline? 5 Key Insights

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