The recent crypto crash is ongoing, with Bitcoin and most altcoins, including Ripple (XRP), Cardano (ADA), Dogecoin (DOGE), and Sui (SUI), falling by over 5% in the last 24 hours. Combined, the market capitalization of all tokens dropped by 3.3% in the last 24 hours to $3.76 trillion.
Bitcoin and Ethereum Options Expiry
One major reason for the crypto crash is that Bitcoin and Ethereum options worth over $15 billion have just expired. Historically, BTC and ETH prices have normally dropped sharply before and shortly after this expiry occurs.
Bitcoin plunged to $108,000, while Ethereum dropped to $4,337. Most altcoin prices normally drop whenever BTC and ETH are in a downward trend.
Federal Reserve Uncertainty
The crypto crash is also occurring amid concerns about the Federal Reserve. In his statement at the Jackson Hole Symposium last week, Jerome Powell hinted that the bank would slash interest rates, warning that the labor market was slowing.
Data released this week, however, hinted that any rate cut will be a hawkish one. A report on Thursday showed that the economy expanded by 3.3% in the second quarter of last year. Another one released on Friday revealed that the US inflation remained high.
Therefore, there is a possibility that the Fed cuts will not come out faster than analysts were expecting.
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Slowing AI Growth
The stock and crypto crash is happening because of this week’s NVIDIA earnings. In a statement, the company said that its revenue jumped by 53% in the second quarter to $46 billion. It expects third-quarter revenue to exceed $50 billion and full-year revenue to surpass $200 billion.
However, the company also warned that its business was starting to slow as companies start to scale back their investments. As a result, its stock has plunged, dragging the Nasdaq 100 and the S&P 500 indices, and to some extent, the crypto market.
Crypto Crash Triggered by Bearish Bitcoin Pattern
Technicals have also contributed to the ongoing crypto crash. The most important one is that the Bitcoin price has formed a highly bearish rising wedge pattern on the weekly chart and a double top on the daily one.
BTC price chart | Source: TradingView
Additionally, Bitcoin has been forming a bearish divergence pattern on the weekly chart timeframe. As such, it may crash further below the key support at $100,000, dragging the broader crypto market lower.
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