After a market crash on August 5, 2024, the overall cryptocurrency landscape was experiencing an upside move. Amid this bullish momentum, top assets Bitcoin (BTC) and Ethereum (ETH) have experienced notable price surges and also hit the $57,600 level and $2,551, respectively. However, both are now experiencing notable selling pressure.
Bitcoin and Ether fall again
At press time, BTC and ETH have seen price drops of 3.8% and 6% respectively, in the last 24 hours.
The bullish rally in the cryptocurrency and other markets was driven by Shinichi Uchida, the Deputy Governor of the Bank of Japan, who stated that the bank won’t increase the interest rate. This comment from the Deputy Governor not only created stability in the market but also supported both Japanese stocks and the U.S. stock market.
Potential reasons for the Cryptocurrency decline
However, this optimism in the market was only for a short period. After a gap-up opening, the U.S. Nasdaq and S&P 500 declined, with both currently down by 0.97% and 0.78% respectively. Meanwhile, Dow Jones is down by 0.6%. At press time, all these indexes are moving toward the previous day’s lows.
This immediate fall in the U.S. stock market has caused a massive decline in the cryptocurrency market.
Signs of recession
Amid this downturn, former president of the Federal Bank of New York Bill Dudley stated that the Fed needs to cut the interest rates significantly and soon, according to a recent Bloomberg report. Dudley believes the rising of unemployment as it reached 4.13% indicates a recession may be on its way.
Additionally, he suggested that to neutralize the interest rates the Fed would need to cut rates by at least 150 basis points and potentially another 100 basis points for the economic support.
Whereas, JPMorgan CEO Jamie Dimon speaking with CNBC said that the Fed interest rate cut won’t have much impact on the market.