Bitcoin and Ethereum experienced dramatic declines yesterday, reflecting growing panic in the markets. After an initial rally in response to US economic data, Bitcoin fell nearly 8%, while Ethereum fell more than 10%. This development is linked to the negative development on the stock markets, which contributed to the general nervousness.
Bitcoin and the Stock Market: The Crash and the Panic
Bitcoin (BTC) experienced a dramatic reversal yesterday. After a brief rise to $57,000 following the release of US economic data, the cryptocurrency quickly plunged to $52,500. This plunge of nearly 8% in just 9 hours caused increased jitters in the market. Currently, the price of Bitcoin has recovered slightly and is hovering around $54,000.
Ethereum (ETH) saw a similar development, falling by more than 10%. Last night, its price hit a low around $2150, but now it is gradually coming back towards $2300.
Stock Market and Economic Data
The current washout in cryptocurrency markets is likely linked to the sharp decline in the stock market, which was largely driven by negative economic data. Wall Street had its worst week since 2023, adding to the general panic in the markets. It is expected that the September decision of the Federal Reserve System ( FED ) on interest rates may influence further developments.
Fear and Greed Index and Cryptocurrency ETFs
Fear and Greed Index (Fear and Greed) fell to 23 points, indicating extreme fear among investors. This sentiment is also reflected in cryptocurrency ETF funds, which have experienced significant outflows. Bitcoin ETFs closed the week with outflows of over $705 million, with the largest outflow coming from the Fidelity fund. Ethereum ETFs also suffered losses as another $6 million exited them.
Support and Regulatory Issues
Chris Larsen, co-founder of Ripple, has expressed his support for Vice President Kamala Harris in her presidential campaign, which contrasts with recent changes in government advisory circles. At the same time, Telegram founder Pavel Durov gave his first public response to his recent detention in France. Durov expressed surprise at his detention and noted his company’s readiness to exit jurisdictions hostile to its mission to promote free speech.
