CryptoMediaClub
Tuesday, July 8, 2025
  • All news
  • Bitcoin
  • Ethereum
  • Altcoins
  • NFT
  • Blockchain
  • Analysis
No Result
View All Result
  • All news
  • Bitcoin
  • Ethereum
  • Altcoins
  • NFT
  • Blockchain
  • Analysis
No Result
View All Result
CryptoMediaClub
No Result
View All Result
Home Altcoins

Why is the crypto market down this week?

24.08.2023
A A
0
124
VIEWS
ShareShare

The cryptocurrency market has experienced a notable downturn recently, with the total market capitalization falling by 10% between Aug. 14 and Aug. 23, reaching its lowest point in over two months at $1.04 trillion. This movement has triggered significant liquidations on futures contracts, the most since the FTX collapse in November 2022.

Total cryptocurrency market capitalization, USD. Source: TradingView

Several economic factors have contributed to this decline. As interest rates have surpassed the 5% mark and inflation remains above the 2% target, borrowing costs for both families and businesses have risen, placing pressure on consumer spending and economic expansion. That means less money is available for savings, which could force people to let go of their investments just to cover monthly bills.

Since inflation expectations for 2024 stand at 3.6% and average hourly earnings increased by 5.5% year-over-year, the fastest pace since 2020, the Federal Reserve is likely to maintain or even raise interest rates in the coming months. Consequently, a high interest rate scenario favors fixed-income investments, which is detrimental to cryptocurrencies.

Inflation has receded from its peak of 9% to the current 3%, while the S&P 500 Index is only 9% below its all-time high. This could indicate a “soft landing” orchestrated by the Federal Reserve, suggesting that the likelihood of an extended and profound recession is diminishing, temporarily undermining Bitcoin's investment thesis as a hedge.

Factors emerging from the cryptocurrency industry

Investor expectations had been high for the approval of a spot Bitcoin exchange-traded fund (ETF), particularly with heavyweight endorsements from BlackRock and Fidelity. However, these hopes were dashed as the United States Securities and Exchange Commission (SEC) continued to delay its decision, citing concerns over insufficient safeguards against manipulation. Complicating matters, a substantial volume of trading continues to occur on unregulated offshore exchanges using stablecoins, raising questions about the authenticity of market activity.

Financial difficulties within the Digital Currency Group (DCG) have also had a negative impact. A subsidiary of DCG is grappling with a debt exceeding $1.2 billion to the Gemini exchange. Additionally, Genesis Global Trading recently declared bankruptcy due to losses stemming from the collapses of Terra and FTX. This precarious situation could lead to forced selling of positions in the Grayscale Bitcoin Trust if DCG fails to meet its obligations.

Further compounding the market’s woes is regulatory tightening. The SEC has leveled a series of charges against Binance and its CEO, Changpeng "CZ” Zhao, alleging misleading practices and the operation of an unregistered exchange. Similarly, Coinbase faces regulatory scrutiny and a lawsuit centered on the classification of certain cryptocurrencies as securities, highlighting the ambiguity in U.S. securities policy.

U.S. dollar strengthening despite global economic slowdown

Signs of trouble stemming from lower growth in China have also emerged. Economists have revised down their growth forecasts for the country, with both imports and exports experiencing declines in recent months. Foreign investment into China dropped by over 80% in the second quarter compared to the previous year. Worryingly, unpaid bills from private Chinese developers amount to a staggering $390 billion, posing a significant threat to the economy.

Despite the prospect of a deteriorating global economy, which could potentially bolster Bitcoin’s appeal due to its scarcity and fixed monetary policy, investors are showing a propensity to flock to the perceived safety of U.S. dollars. This is evident in the movement of the U.S. Dollar Index (DXY), which has surged from its July 17 low of 99.5 to its current level of 103.8, marking its highest point in more than two months.

U.S. Dollar Index (DXY). Source: TradingView

As the cryptocurrency market navigates through these multifaceted challenges, the ebb and flow of various economic factors and regulatory developments will undoubtedly continue to shape its trajectory in the coming months.

Such a situation could possibly be an outcome of excessive optimism following the submission of multiple spot Bitcoin ETF requests in mid-June, so instead of focusing on what caused the recent 10% correction, one could question whether the rally in mid-July from a $1.0 trillion market capitalization to $1.18 trillion was justified in the first place.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Share10Tweet6ShareSharePin2

Related Posts

Solana gains 80% in a month as Firedancer goes live on testnet
Altcoins

Solana gains 80% in a month as Firedancer goes live on testnet

02.11.2023
0

Solana (SOL) has posted 30-day gains of nearly 81%, and has rallied over 30% in the past week amid the...

Read moreDetails
Price analysis 10/30: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, TON

Price analysis 10/30: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, TON

30.10.2023
Bitcoin price hovers near $35K as ETH, APT, QNT and RUNE turn bullish

Bitcoin price hovers near $35K as ETH, APT, QNT and RUNE turn bullish

30.10.2023
Chainlink leads the market with 61% weekly gain — What’s driving LINK price?

Chainlink leads the market with 61% weekly gain — What’s driving LINK price?

27.10.2023
FLOKI price soars 140% in a week — Are memecoins like DOGE, PEPE finally waking up?

FLOKI price soars 140% in a week — Are memecoins like DOGE, PEPE finally waking up?

27.10.2023
Load More
Next Post

Binance.US Taps MoonPay to Enable Crypto Purchases with USDT

0 0 votes
Рейтинг статьи
Subscribe
Notify of
guest
guest
0 комментариев
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Recommended

Stablecoins Settled as Much Value as Visa in 2022: Analysis

2 years ago
Trump’s Truth Social Wants to Launch a Bitcoin & Ethereum ETF – Here’s What That Could Mean

Trump’s Truth Social Wants to Launch a Bitcoin & Ethereum ETF – Here’s What That Could Mean

3 weeks ago
Crypto amplified financial risks in emerging markets: BIS papers

Crypto amplified financial risks in emerging markets: BIS papers

2 years ago
Bitcoin price retests key support as Fed rate hike fears steal $27K

Bitcoin price retests key support as Fed rate hike fears steal $27K

2 years ago

Categories

  • All news
  • Altcoins
  • Analysis
  • Bitcoin
  • Blockchain
  • Ethereum
  • NFT
No Result
View All Result

Highlights

DDC Enterprise’s Bold Bitcoin Move: Boosting Holdings to 368 BTC Signals Strategic Shift

BONK’s SOL Buying Spree Counters Pump.Fun $741M Sell-off – Can LetsBONK Trigger 70% Pump?

Canaan’s Astounding 1,484 BTC Holdings: A Bitcoin Mining Powerhouse Emerges

Pepe Price Prediction: PEPE Explodes Out of Falling Wedge Pattern – $1 PEPE Next Target?

Coinsilium’s Strategic Bitcoin Accumulation: A Bold Move in Digital Assets

Fukuoka Financial Group to Develop Stablecoin and Web3 Wallet on Solana

Trending

Bitcoin remains stuck in $100k-$110k band as retail and whales enter potential standoff
Analysis

Bitcoin remains stuck in $100k-$110k band as retail and whales enter potential standoff

08.07.2025
0

Bitcoin (BTC) continued to trade between $100,000 and $110,500 for a second consecutive week as smaller investors...

ChatGPT’s 42-Signal TON Analysis Flags Critical $2.70 Support Collapse After UAE Golden Visa Scandal

ChatGPT’s 42-Signal TON Analysis Flags Critical $2.70 Support Collapse After UAE Golden Visa Scandal

08.07.2025
Pi Coin Price Prediction: Daily Volume Collapses Below $100M – Are Whales Dumping and Vanishing for Good?

Pi Coin Price Prediction: Daily Volume Collapses Below $100M – Are Whales Dumping and Vanishing for Good?

07.07.2025
DDC Enterprise’s Bold Bitcoin Move: Boosting Holdings to 368 BTC Signals Strategic Shift

DDC Enterprise’s Bold Bitcoin Move: Boosting Holdings to 368 BTC Signals Strategic Shift

07.07.2025
BONK’s SOL Buying Spree Counters Pump.Fun $741M Sell-off – Can LetsBONK Trigger 70% Pump?

BONK’s SOL Buying Spree Counters Pump.Fun $741M Sell-off – Can LetsBONK Trigger 70% Pump?

07.07.2025
  • All news
  • Altcoins
  • Bitcoin
  • Blockchain
  • Ethereum
  • NFT
  • Analysis
Editor: cryptomediaclub.com@gmail.com
Advertising: digestmediaholding@gmail.com

Disclaimer: Information found on CryptoMediaClub is those of writers quoted. It does not represent the opinions of CryptoMediaClub on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoMediaClub covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.

© 2023 Crypto News. All Rights Reserved

No Result
View All Result
  • All news
  • Bitcoin
  • Ethereum
  • Altcoins
  • NFT
  • Blockchain
  • Analysis

Disclaimer: Information found on CryptoMediaClub is those of writers quoted. It does not represent the opinions of CryptoMediaClub on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoMediaClub covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.

© 2023 Crypto News. All Rights Reserved

wpDiscuz