Data Shows Bitcoin and Altcoins Likely to Fall 20% to New Yearly Lows
The total crypto market capitalization has fallen to the $1 trillion support, and weak demand for stablecoins and a rate of largely absent funding reflect negative sentiment among traders.< /p>
Market analysis
After the breakout of the rising wedge formation on August 17, the total crypto market cap quickly fell to $1 trillion and the bulls dream of reclaiming the $1.2 trillion support seen for last seen on June 10, has become even more distant.
Total Market Cap of crypto, billions of dollars. Source: TradingViewDeteriorating conditions are not exclusive to crypto markets. The price of WTI oil fell 3.6% on August 22, down 28% from the high of $122 seen on June 8. at 3.16%. These are all signs that investors are feeling less confident about the central bank's policies of asking for more money to hold these debt securities.
Recently, Goldman Sachs Chief U.S. Equity Strategist David Kostin said the S&P 500's risk-reward ratio was trending lower after rising 17% since mid-June. According to a client note written by Kostin, upside inflation surprises would force the US Federal Reserve to tighten the economy more aggressively, negatively impacting valuations.
Meanwhile, prolonged shutdowns meant to contain the spread of COVID-19 in China and real estate debt concerns prompted the PBOC to get the central bank to cut its five-year prime rate to 4.30%, compared to 4.45% on August 21. Curiously, the move came a week after China's central bank cut interest rates in a surprise move.
Crypto Investor Sentiment Borders “Neutral to Bearish”The risk attitude induced by soaring inflation has led investors to expect further interest rate hikes, which, in turn, will diminish investors' appetite for equities growth, commodities and cryptocurrencies. As a result, traders are likely to seek shelter in the US dollar and inflation-protected bonds during times of uncertainty.
Crypto Fear & . ..
The total crypto market capitalization has fallen to the $1 trillion support, and weak demand for stablecoins and a rate of largely absent funding reflect negative sentiment among traders.< /p>
Market analysis
After the breakout of the rising wedge formation on August 17, the total crypto market cap quickly fell to $1 trillion and the bulls dream of reclaiming the $1.2 trillion support seen for last seen on June 10, has become even more distant.
Total Market Cap of crypto, billions of dollars. Source: TradingViewDeteriorating conditions are not exclusive to crypto markets. The price of WTI oil fell 3.6% on August 22, down 28% from the high of $122 seen on June 8. at 3.16%. These are all signs that investors are feeling less confident about the central bank's policies of asking for more money to hold these debt securities.
Recently, Goldman Sachs Chief U.S. Equity Strategist David Kostin said the S&P 500's risk-reward ratio was trending lower after rising 17% since mid-June. According to a client note written by Kostin, upside inflation surprises would force the US Federal Reserve to tighten the economy more aggressively, negatively impacting valuations.
Meanwhile, prolonged shutdowns meant to contain the spread of COVID-19 in China and real estate debt concerns prompted the PBOC to get the central bank to cut its five-year prime rate to 4.30%, compared to 4.45% on August 21. Curiously, the move came a week after China's central bank cut interest rates in a surprise move.
Crypto Investor Sentiment Borders “Neutral to Bearish”The risk attitude induced by soaring inflation has led investors to expect further interest rate hikes, which, in turn, will diminish investors' appetite for equities growth, commodities and cryptocurrencies. As a result, traders are likely to seek shelter in the US dollar and inflation-protected bonds during times of uncertainty.
Crypto Fear & . ..
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