The crypto market is crashing today, August 26, continuing a downtrend that last weekend. Bitcoin price plunged below the important support level at $110,000, bringing its market capitalization to over $2.18 trillion.
Ethereum price dropped by 7.54%, while XRP, Solana, and Chainlink plunged by over 8%. The market capitalization of all cryptocurrencies dropped by 4.45% in the last 24 hours to 3.78 trillion, down from over 4.1 trillion a few weeks ago.
Why crypto market is down
The crypto market is down today as investors wait for key corporate and macro events of the week.
One of the top events is Wednesday’s NVIDIA earnings, which will provide hints on the ongoing artificial intelligence hype. The average estimate by analysts is that its revenue rose by 48% in the last quarter despite the ban in shipments from China.
NVIDIA is a significant company that impacts the stock and cryptocurrency markets due to its size and role in artificial intelligence (AI), where it provides the GPUs that power these technologies.
A strong NVIDIA report and guidance will boost the stock and crypto market, while weak numbers will lead to more downside.
Traders are waiting for more data
The crypto market has also crashed because of the recent statement by Jerome Powell at the Jackson Hole Symposium. In it, he hinted that the Federal Reserve would cut rates by 0.25%, citing the deteriorating labor market.
The odds of a cut have jumped in the past few days. A Polymarket poll with $48 million in assets places the odds of a cut in the September meeting at 77%.
This statement was bullish for the crypto market as these tokens normally do well in a low-interest environment. Now, however, inventors are waiting for more data to confirm whether the bank will cut in its September.
The first data will come out on Friday when the US releases the latest personal consumption expenditure (PCE) data. PCE is an important inflation gauge that looks at the change in prices in urban and rural areas.
The next report is scheduled for release next week, when the US publishes its labor market data, and a week later, when officials publish the consumer price index. These events explain why the US bond yields rose. In a note, an analyst told Bloomberg:
“While we still see the Fed cutting in September, we now have to figure out whether it will be a ‘dovish cut’ or a ‘hawkish cut’. We don’t want one to think that inflation is not that important, but the real unknown risk to the economy is the employment situation.”
Liquidations and Bitcoin technicals
The crypto market also crashed because of the rising liquidations of bullish traders. CoinGlass data shows that the 24-hour liquidations jumped to over $942 million. Ethereum bulls worth over $320 million were liquidated, higher than Bitcoin’s $268 million and Solana’s $51 million.
Technicals also contributed to the crypto market crash. As the above chart shows, Bitcoin price formed a double-top pattern at $123,200 and a neckline at $112,000. This pattern has a depth of about 9%. Measuring the same distance from the neckline points to a crash to $100,000.
This pattern, together with the rising wedge on the weekly chart, point to more Bitcoin pullback, which will lead to more crypto market crash.
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