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Why Is Bitcoin and Crypto Market Crashing Today?

Published

3 weeks ago

August 28, 2024

The crypto market is witnessing a massive crash today, extending the meltdown amid Bitcoin price correction. The sudden selloff in Bitcoin in Asia hours sparked concerns about a potential fall below $58,000 as traders face liquidation despite the US Fed signaled rate cuts in September.

The crypto market is turning out to be more volatile ahead of Nvidia earnings, with US stock market index futures almost flat. The company’s strong Q2 earnings report will fuel an uptrend in stocks and AI coins. Nvidia stock price is up 0.42% at $127.77 in premarket trading hours.

Here’s Why Crypto Market Is Crashing Today

The crypto market cap tumbled to $2.06 trillion today due to market trends, technical chart weakness, and macroeconomic factors. Despite a slight rebound in the US hours, the uncertainty among investors continues to exist.

According to CoinGlass data, nearly 87K traders were liquidated in the last 24 hours, with total liquidation amounting to $320 million. Almost $260 million in longs and $60 million in shorts were liquidated.

Binance Faced Backlash on Reports Seized Assets

Binance faced backlash after reports alleged the exchange of seizing crypto assets from Palestinians. Crypto prices immediately fell after the centralized exchange was rumored to seize users’ crypto assets and block accounts on the order of the government.

However, Binance co-founder Yi He has refuted the allegations and revealed that only user accounts linked to illicit funds were blocked to comply with anti-money laundering laws. The crypto market rebounded slightly after Binance denied seizing crypto assets from accounts linked to Palestinians. The market is currently flashing signs of recovery, with a potential rally in the coming weeks.

Bitcoin Price Breaks Below Trendline On Liquidity Issue

Matrixport reported that Bitcoin dropped sharply amid long liquidations likely due to low liquidity. Traders who went long after the US Federal Reserve Chair Jerome Powell signed rate cuts were liquidated. The crypto market research firm asserts that concerns will mount if Bitcoin fails to rebound over $59,000.

BTC price broke below the ascending trendline, which triggered a broader market-wide selloff. The key support level is at $58,000. If the price breaks below, it may drop to the next psychological level at $55,000.

Bitcoin needs to rebound above $63,000 for confirmation of a bullish upcoming momentum. As per Fib retracement, the price is likely to rally and many traders expected a drop after the BTC price hit $65,000. Traders can expect resistance at the $61,300-$61-500 range.

Macroeconomic Factors and Upcoming Monthly Crypto Market Expiry

The crypto market is to witness a monthly expiry on August 30. Bitcoin options worth $3.65 billion and Ethereum options worth $1.35 billion are set to expire on the largest derivatives exchange Deribit.

Moreover, the U.S. Bureau of Economic Analysis will release the US PCE inflation data on August in the US decreased to 2.5%. The market expects annual PCE and core PCE inflation to come in higher at 2.6% and 2.7%, a 0.1% increase in both.