The cryptocurrency market faced significant turbulence as it plunged to its lowest levels in over five months, mirroring broader economic anxieties stemming from Japan's stock market turmoil following a recent rate hike by its central bank.
Bitcoin and Ethereum, the leading cryptocurrencies by market capitalization, experienced substantial declines of 9% and 18% respectively over the past 24 hours. This downturn coincided with a notable surge in trading volumes, which spiked by more than 214% compared to the previous day. Crypto exchange Swyftx reported a surge of 226% in trading activity driven by heavy dip-buying.
Bitcoin, Solana, and Ethereum emerged as the most actively traded assets, collectively accounting for about 67% of the total volume late Sunday. Notably, buy orders for Bitcoin and Ethereum outnumbered sell orders, diverging from the typical 2:1 ratio seen in normal trading conditions.
According to CoinGecko data, other major cryptocurrencies also recorded declines ranging from 6% to 20%, underscoring the widespread market sell-off triggered by recessionary fears and global economic uncertainties.
Sylvia To, director of Bullish Capital, noted that recessionary concerns initially sparked a sell-off in U.S. equity markets, a sentiment that subsequently spilled over into the cryptocurrency space. Investors sought refuge in traditional safe-haven assets amidst rising anxiety over economic indicators such as the U.S. unemployment rate, which climbed from 4.1% to 4.3% in June.
The turmoil extended to Japan's stock markets, where both the Topix and Nikkei 225 indexes plummeted over 7% in morning trading, signaling a bear market and triggering a circuit breaker halt in trading. This marked their sharpest decline since the aftermath of the 2011 tsunami and Fukushima nuclear disaster, exacerbated by the Bank of Japan's decision to raise its benchmark interest rate to 0.25%, the highest level since 2008.
As global markets reel from these developments, the cryptocurrency sector remains volatile, with investors closely monitoring economic indicators and policy shifts for their impact on digital assets. The recent downturn serves as a stark reminder of the interconnectedness between traditional financial markets and the burgeoning cryptocurrency landscape amid uncertain global economic conditions.
August 2024, Cryptoniteuae