The crypto market crash continued on Friday morning as traders awaited the upcoming US consumer inflation report, and after Standard Chartered, a long-term bull, downgraded its Bitcoin target. The Bitcoin price fell to $65,000, while the market capitalization of all tokens fell to $2.27 trillion.
The Crypto Fear and Greed Index fell to an extreme oversold level of 8, while spot and futures volume and open interest continued to decline.
Crypto Market Crash Continues as Stocks Dive
One major reason for the crypto market crash on Friday was the risk-on sentiment, as US equities dipped.
The tech-heavy Nasdaq 100 Index dropped by 470 points to $22,600, while the S&P 500 and the Dow Jones fell by 108 and 660 points. Also, the VIX Index jumped by over 17%.
This price action occurred due to ongoing uncertainty in the artificial intelligence (AI) industry. For example, companies in the insurance brokerage, real estate, and wealth management industries plunged amid fears of AI disruption.
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Standard Chartered warning and Coinbase Earnings
The crypto market crash also happened after Standard Chartered, a top British bank, downgraded its Bitcoin price target. It lowered its year-end target from $150,000 to $100,000 and warned that the coin may decline further to $50,000 before rebounding. StanChart previously predicted that the Bitcoin price would hit $300,000 this year.
Standard Chartered cited ongoing crypto ETF outflows, technical factors, and the lack of a clear industry narrative. For example, Bitcoin ETFs have lost more than $6 billion in assets over the past four months.
Meanwhile, Coinbase, the biggest crypto exchange in the United States, published a weak financial report as the crash continued. Its revenue tumbled by 20% to $1.8 billion, while its loss jumped to $667 million. The loss was mostly because of the value of its crypto holdings, such as Bitcoin and Ethereum.
Robinhood, another major crypto company, reported that its crypto revenue declined by 38% in the fourth quarter after recording triple-digit growth in the previous two quarters.
US Inflation Report Ahead
The next important catalyst for the crypto market will be the upcoming U.S. Consumer Price Index (CPI) report, which will be released on Friday.
Economists expect the report to show that headline and core inflation continued to fall in January, with headline inflation at 2.5% and core inflation at 2.6%.
Still, some Federal Reserve officials warned that a downtick in inflation will not automatically lead to interest rate cuts. Lorie Logan and Beth Hammack warned that rates may remain higher for longer until inflation moves below the 2% target.
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