The crypto market crash continued on Friday morning as traders waited for the upcoming US consumer inflation report and after Standard Chartered, a long-term bull, downgraded its Bitcoin target. Bitcoin price dropped to $65,000, while the market capitalization of all tokens fell to $2.27 trillion.
The Crypto Fear and Greed Index dropped to the extreme oversold level of 8, while the volume in the spot and the futures open interest continued falling.
Crypto Market Crash Continues as Stocks Dive
One major reason why the crypto market crash happened on Friday is because of the risk-on sentiment in the market 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 happened because of the ongoing jitters on 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 target for the year from $150,000 to $100,000 and warned that the coin may drop further to $50,000 before bouncing back. StanChart previously predicted that Bitcoin price would hit $300,000 this year.
Standard Chartered cited the ongoing crypto ETF outflows, technicals, and the lack of a clear narrative in the industry. For example, Bitcoin ETFs have shed over $6 billion in assets in the last 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 top crypto company, said that its crypto revenue dropped 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 US Consumer Price Index (CPI) report, which will come out on Friday.
Economists expect the report to show that the headline and core inflation continued falling in January, with the headline inflation coming in at 2.5% and the core inflation falling to 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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