The cryptocurrency market is plummeting today, August 26, following a slump that began last weekend. Bitcoin’s price fell below the critical support barrier of $110,000, pushing its market worth to more over $2.18 trillion.
Ethereum’s price decreased by 7.54%, while XRP, Solana, and Chainlink all fell by more over 8%. The market value of all cryptocurrencies fell by 4.45% in the previous 24 hours to 3.78 trillion, down from more than 4.1 trillion a few weeks ago.
Why the cryptocurrency market is down
The cryptocurrency market is down today as investors await significant corporate and macroeconomic announcements for the week.
One of the most anticipated events is Wednesday’s NVIDIA results, which will give insights into the growing artificial intelligence frenzy. Analysts believe that its sales increased by 48% in the past quarter despite the restriction on Chinese imports.
NVIDIA has a big effect on the stock and cryptocurrency markets due to its size and significance in artificial intelligence (AI), where it produces the GPUs that enable these technologies.
A solid NVIDIA report and outlook will support the stock and cryptocurrency markets, whilst disappointing results would lead to further declines.
Traders are awaiting additional data
The cryptocurrency market has also fallen as a result of Jerome Powell’s recent remarks at the Jackson Hole Symposium. In it, he implied that the Federal Reserve will lower interest rates by 0.25%, citing the weakening labor situation.
The likelihood of a cut has increased in recent days. A Polymarket survey with $48 million in assets predicts a 77% reduction at the September meeting.
This comment was positive for the cryptocurrency market because these tokens often do well in a low-interest economy. Inventors are currently waiting for further data to clarify whether the bank plans to cut in September.
The first statistics will be released on Friday, when the United States releases its latest personal consumption expenditure (PCE) figures. PCE is an essential inflation indicator that measures price changes in both urban and rural areas.
The next report will be released next week, when the United States publishes its labor market statistics, followed by the consumer price index a week later. These events explain why US bond rates have risen. In a letter, an analyst informed Bloomberg:
“While we still expect the Fed to cut in September, we need to determine whether it will be a ‘dovish cut’ or a ‘hawkish cut’. We don’t want anyone to think that inflation isn’t serious, but the major unknown risk to the economy is the labor market.”
Liquidation and Bitcoin Technicals
The crypto market also plummeted due to increased liquidations by optimistic traders. According to CoinGlass statistics, 24-hour liquidations surged to more over $942 million. Ethereum bulls were liquidated for almost $320 million, more than Bitcoin’s $268 million and Solana’s $51 million.
Technical factors also contributed to the cryptocurrency market fall. The chart above illustrates that Bitcoin price produced a double-top pattern at $123,200 and a neckline at $112,000. This pattern has a depth of around 9%. Measuring the same distance from the neckline indicates a crash worth $100,000.
This pattern, together with the rising wedge on the weekly chart, predicts additional Bitcoin pullbacks, which will lead to another crypto market meltdown.
