Following a market crash on August 5, 2024, the overall cryptocurrency landscape has seen an upward movement. Amid this bullish momentum, top assets Bitcoin (BTC) and Ethereum (ETH) have experienced notable price increases, reaching the $57,600 and $2,551 levels respectively. However, both are now experiencing significant selling pressure.
Bitcoin and Ether fall again
At the time of writing, BTC and ETH prices have dropped by 3.8% and 6% respectively in the past 24 hours.
The bullish rally in the cryptocurrency and other markets was led by Bank of Japan Vice Governor Shinichi Uchida, who stated that the bank will not raise interest rates. The vice governor’s comment not only provided stability to the market but also supported both Japanese stocks and the US stock market.
Possible Reasons for the Cryptocurrency Drop
However, this optimism in the market was short-lived. After a gap-up opening, the US Nasdaq and S&P 500 fell, currently down 0.97% and 0.78% respectively. Meanwhile, the Dow Jones is down 0.6%. At the time of writing, all of these indices are moving towards the previous day’s lows.
This sudden drop in the US stock market has led to a massive drop in the crypto market.
Signs of recession
Amid this downturn, former Federal Bank of New York President Bill Dudley said the Fed needs to cut interest rates significantly and quickly, according to a recent Bloomberg report. Dudley believes rising unemployment, which has reached 4.13%, indicates a recession is on the way.
In addition, he suggested that the Fed should cut rates by at least 150 basis points and possibly another 100 basis points for economic support to neutralize rates.
JPMorgan CEO Jamie Dimon told CNBC that the Fed’s rate cut won’t have much impact on the market.
