Why Crypto’s Down Today: Reasons Shared by Seasoned Expert

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As a seasoned analyst with over two decades of experience in both traditional and digital markets, I find myself constantly astounded by the intricate dance between global economics and cryptocurrencies. This latest crypto bloodbath is no exception, and it appears we are witnessing a perfect storm of events that has sent prices plummeting to multi-month lows.

Experienced cryptocurrency analyst Miles Deutscher offers several potential causes for the current market turmoil in the crypto sector, suggesting that a confluence of worldwide economic triggers, along with significant events within the crypto industry itself, have created what he refers to as an “unprecedented convergence,” or a perfect storm.

From Japanese yen to Mt. Gox: What pushed crypto to multi-month lows?

Cryptocurrency analyst Miles Deutscher shares the top catalysts that caused the most dramatic crypto capitalization drop in many months. According to him, largely, this volatility spike should be attributed to geopolitical tensions across the globe and sentiment changes in the U.S. Presidential Election race.

Potential factors causing a drop in cryptocurrency prices:

— Miles Deutscher (@milesdeutscher) August 4, 2024

From a broader economic perspective, the potential weakening of the Japanese yen could potentially be linked to the recent drop in cryptocurrency prices. Previously reported by U.Today, this asset experienced an astonishing 10% increase within just 30 days, synchronizing with the strengthening of the US dollar.

Simultaneously, the Nikkei Stock Average 225, a benchmark for the stocks of major Japanese companies, experienced its most significant decline since the infamous Black Monday in 1987.

Subsequently, the concern among investors escalated due to the release of worrying jobless figures in the United States. Specifically, the unemployment rate increased to 4.3% in July, marking a 0.2% rise from June, as indicated by the Bureau of Labor Statistics’ latest report on Friday.

Market anxiety heightens amid concerns of a faster-approaching economic downturn, with intense discussions ongoing regarding the potential urgency for the U.S. Federal Reserve to implement interest rate reductions in either August or September.

Nevertheless, the negative factors intrinsic to cryptocurrency (often referred to as “crypto-native”) have played out, contributing to a bearish market. The impact of Mt. Gox’s compensation distribution remains uncertain, and a significant trading firm, Jump Crypto, may be offloading its holdings, which could further influence the market trends.

$27 million lost in single BTC long liquidation today

Recently, it’s been claimed that Jump Crypto has withdrawn approximately 120,000 wETH from Lido Finance with the intention of selling them off promptly.

Additionally, a cryptic Solana ‘giant’ (or large investor) is reported by Colin Wu to have transferred approximately $120 million worth of SOL tokens from multiple validators to Coinbase Prime.

In my analysis, we’re currently navigating one of the toughest market corrections in recent months. Over the past day, a staggering $1.2 billion worth of cryptocurrency positions have been liquidated – the highest since mid-April. Remarkably, approximately 85% of these liquidations were long positions.

Today, a record $27 million worth of Bitcoin (BTC) from a trader’s long position on Huobi was liquidated, as per CoinGlass data.

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2024-08-05 17:35