Why Is Crypto Crashing Today? Find Out!

Why Is Crypto Crashing Today? Find Out!

The crypto market dropped over 1.5% despite positive economic data, driven by volatility and liquidations, leaving investors concerned.

Jesse Anglen
September 12, 2024

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Why is the crypto market taking a nosedive today? Despite positive economic data, the total market cap dropped over 1.5% before bouncing back, leaving many investors scratching their heads. With Bitcoin and Ether experiencing wild price swings, it’s clear that volatility is the name of the game in . What’s really driving this chaos?

The cryptocurrency market experienced a notable downturn on September 11, despite the release of positive economic data from the United States. The total market capitalization plummeted by over 1.5%, dipping to approximately $1.97 trillion before rebounding to around $2 trillion. This volatility can be attributed to the August Consumer Price Index (CPI) report, which indicated a slowdown in inflation. Traders reacted swiftly to this data, leading to profit-taking after Bitcoin had demonstrated strength prior to the release. The instability in the crypto market closely mirrors the fluctuations observed in U.S. stock markets, with major indexes also facing declines.

The drop in cryptocurrency prices was significant, with Bitcoin falling 2% to $55,713 before recovering to $57,010. Similarly, Ether experienced a decline of 1.9%, dropping to $2,290, before rising to $2,342. The U.S. Bureau of Labor Statistics reported a 0.2% month-over-month increase in the CPI, a key measure of inflation. The Core CPI, which excludes volatile food and energy prices, rose by 0.3%, slightly exceeding expectations. This data is particularly crucial as it precedes the Federal Open Market Committee (FOMC) meeting scheduled for September 18, where decisions regarding interest rates will be made.

Market analysts suggest that the recent price movements are partly driven by liquidations in the crypto futures market. Over $160 million in liquidations occurred, with long traders facing the most significant losses. When these positions are liquidated, it creates additional selling pressure, further driving down prices. Furthermore, a bearish trend is indicated by a bear flag pattern, suggesting a potential further decline in market value if support levels are breached.

In summary, the decline in the crypto market today is a result of multiple factors, including economic data, market volatility, and liquidations. Investors should remain vigilant as the market continues to respond to economic indicators and the impending decisions from the Federal Reserve.

For those looking to navigate the complexities of the cryptocurrency landscape, partnering with a leading AI and Blockchain solutions provider like Rapid Innovation can offer invaluable insights and strategies. Our expertise in analyzing market trends and leveraging advanced technologies can help you make informed decisions and optimize your investment strategies. If you're interested in learning more about how we can assist you in achieving your financial goals, please reach out to us today.

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