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Why is the crypto market down today? September worries build-up

In this post:

  • Crypto markets fall, losing all the gains from the favorable Grayscale court verdict. Core PCE data has shaken up digital asset markets.
  • Core PCE in July rose 4.2% year over year, up from a 4.1% annual rate recorded in June but in line with analysts’ expectations.
  • NFT markets have started to show signs of recovery after a dead silence in the last few months.

The fourth quarter of 2023 has arrived, and the performance of the crypto market does not appear promising. Bitcoin and other crypto coins fell following the release of crucial inflation data, continuing their decline after a rally this week in response to a favorable court ruling. September has historically been a difficult month for Bitcoin, and traders are growing concerned.

BTC and Ether fell during Thursday afternoon trade in Asia, along with the remaining top 10 crypto coins. The only token to register gains was Dogecoin. The value of cryptocurrencies increased on Wednesday following a verdict in favor of Grayscale Investments in its ongoing legal dispute with the Securities and Exchange Commission (SEC).

Crypto markets set for a tough Q4 2023

Bitcoin’s price has fallen by less than 1% in the last 24 hours to $27,250 after moving up slightly by approximately $50 following the release of US inflation data. The greatest digital asset has retreated from a high of more than $28,000 hit on Tuesday after a U.S. court ruled against the Securities and Exchange Commission in a landmark decision that should clear the way for a spot Bitcoin exchange-traded fund.

The next halving event for Bitcoin is scheduled for April 2024, and it is expected to cut the number of new Bitcoins in half, increasing scarcity and driving up prices.

The crypto market is volatile and can be influenced by a variety of variables, such as regulatory news and macroeconomic movements.

Bitcoin has underperformed the Dow Jones Industrial Average and the S&P 500 in recent days, continuing a trend that has heralded one of the quietest times in crypto history. Traders’ bets on Thursday bringing a new catalyst in the shape of personal consumption expenditures (PCE) data, the Federal Reserve’s favored measure of inflation, appear to have gone flat.

Core PCE grew 4.2% year on year in July, up from 4.1% in June but in line with experts’ estimates.

Economic data continue to be important for risk-sensitive assets as investors adjust their views about the prospects for interest rates, which the Fed has pushed to a generational high since March 2022, smashing Bitcoin and equities alike, in an effort to manage inflation. 

Signs of a slowing economy could prompt the Fed to suspend rate hikes and possibly contemplate cutting borrowing costs sooner, putting the August jobs report on Friday squarely in focus following Thursday’s inflation report.

How are altcoins performing?

There is cautious optimism, but it is tempered by past data and the performance of specific technical indicators. Traders are concerned about Bitcoin and altcoins maintaining their respective 20-week moving averages, as well as how macroeconomic trends, such as the performance of the S&P 500, could impact the market.

According to CoinMarketCap data, ether fell 0.7% to US$1,705 but gained 1.84% on the week.

Except for Dogecoin, all of the top ten non-stablecoin cryptos have fallen in the last 24 hours following a surge on Wednesday following a favorable U.S. court verdict for Grayscale Investments in its continuing legal struggle with the SEC.

The decision is considered a glimmer of hope for Grayscale and is anticipated to pave the way for other financial behemoths such as BlackRock, Fidelity, Invesco, and WisdomTree, which have all filed ETF applications with the SEC and are awaiting clearance. 

However, in early August, the regulator delayed a decision on Ark Investment Management’s ETF application and could do so again.

In the last 24 hours, global crypto market capitalization plummeted 0.67% to US$1.09 trillion, while crypto market volume fell 47.96% to US$28.81 billion.

Meanwhile, total NFT sales volume increased 24.24% in the last 24 hours to US$14.28 million. According to CryptoSlam data, total NFT transactions jumped 2.55% while the number of NFT purchasers increased 2.29%.

Ethereum ranked first among blockchains, with revenues increasing 54.7% to US$8.59 million. Polygon and Solana came in second and third place, respectively.

Among collections, Ethereum-based Bored Ape Yacht Club ranked first, with a 327.95% increase to US$2.39 million in the last 24 hours. Mutant Ape Yacht Club, another Ethereum-based collection, increased by 109.16% to US$593,477, moving it into third place in terms of sales volume.

Polygon’s new Bellyland collection has sold for $552,940 in the last 24 hours, making it the fourth-greatest collection by sales volume.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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