The crypto market is under pressure in multiple ways, as the US election, unclear macroeconomic data and negative sentiment regarding cryptocurrency ETFs outflows all weigh on prices. report You can also read about how to get in touch with us. Nansen.
Broad capitulation sentiment
US traded spot BitcoinBTCEthereum (ETHETFs are experiencing negative flows for a second straight week. According to Farside Investors, Ethereum ETFs have lost over $103.5 Million in two weeks. data.
The market lost approximately $450,000,000 between August 26 and September 7. This rare event in 2024, according to the report may indicate investor capitulation. It is unlike other sell-offs that occurred in March or August.
Also, the institutional interest for Ethereum-based product has declined. VanEck Closing its Ethereum Strategy ETF in less than one year WisdomTree Withdrawing its application with the U.S. Securities and Exchange Commission for an Ethereum ETF on a spot basis.
The Nansen risk management indicator shows a negative BTC momentum while the BTC spread between call and put is not risky, indicating a neutral market position.
Also, Bitcoin tests its 50-week average while Ethereum challenges the 200-week average. Both are critical levels of support.
Uncertainty and elections
Risk assets such as cryptocurrency are expected to be affected by the US Presidential election until November. It is possible that markets are underestimating the effect of a potential influx. “Democratic sweep,” The increase in capital gains and corporate taxes could be a result of this.
Harris’ lead at the top of polls may be affected if he has a poor debate performance.
Macroeconomic indicators show that manufacturing is weak in China, the Eurozone, and the US. Also, the US labor market has cooled.
Even though services and consumption are stable, decreasing savings for less wealthy households could impact on future consumption.
It is hard to tell if this is a picture of a global economy that is slowing down or sliding into recession. The Federal Reserve has projected rate reductions of 225 basis point by 2026. However, this may not be enough to spur growth across all sectors.
Especially in the case of highly valued stock, investors are exposed to risk if there is a disconnect between growth expectations and asset price. As a result, investors are less willing to take on risk.
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Source: cryptoslate.com