Why is the crypto market crashing today? (Sep. 4)
The crypto market is crashing today, Sept. 4, as investors continue waiting for the upcoming non-farm payrolls data from the United States.
- Bitcoin and most altcoins have fallen in the past few days.
- The decline happened as traders waited for the upcoming NFP data.
- The Crypto Fear and Greed Index has moved to the neutral point.
Crypto market crashes ahead of NFP data
Cryptocurrencies pulled back, with Bitcoin (BTC) falling to $110,000, and Ethereum (ETH) hitting $4,400. The market capitalization of all cryptocurrencies dropped by 70 basis points to $3.82 trillion.
This decline is mostly due to the upcoming NFP data, which will confirm whether the Federal Reserve will cut interest rates.
Economists and investors have low expectations, particularly following recent economic data. A report by the Labor Department on Wednesday showed that the number of job vacancies dropped sharply in July.
A prior report revealed that the private sector added 54,000 jobs in August, much lower the previous 106,000 and the median estimate of 65,000.Â
Economists expect the NFP data to show that the economy created 75,000 jobs in August after adding 73,000 a month earlier. If these numbers are correct, they will confirm that the Fed will cut rates by 0.25%.
Crypto Fear and Greed Index is in neutral
The crypto market is crashing as sentiment remains muted. CoinMarketCap data shows that the Crypto Fear and Greed Index has dropped to neutral at 44.
This index comprises several key gauges, including price momentum, volatility, the derivatives market, and market composition. Cryptocurrencies often waver when sentiment is neutral.
At the same time, the Altcoin Season Index has remained unchanged at 52. This performance is due to some of the top altcoins, such as Ethereum, XRP, BNB, and Solana, having retreated over the past few days.
The crypto market also pulled back as liquidation jumped. Data compiled by CoinGlass shows that liquidations rose by 10% to $228 million in the last 24 hours. A jump in liquidations can lead to more selling pressure.
Will cryptocurrencies rebound?
Chances are that the crypto market will rebound this month. The main catalyst for the recovery will be interest rate cuts by the Federal Reserve and the upcoming exchange-traded funds approvals of top altcoins like Solana, XRP, and Hedera Hashgraph.
