Last week the total crypto market cap fell by 20 with many altcoins losing a lot more.
The crypto dip arguably began on Tuesday which makes sense given that the crypto market is highly correlated to the Nasdaq tech stock index.
If that didn’t give it away the Nasdaq also began to dip on that day. As to why the Nasdaq was dipping the answer appears to have been concerns around the quarterly earnings reports for some of the largest big box stores namely Walmart which revealed that although it had crushed expectations for the third quarter it was nonetheless starting to see consumer weakness.
The US recently entered a technical recession following two consecutive quarters of negative GDP growth. Some economists are waiting on more data to make the declaration and the warnings in Walmart’s earnings is one such data point.
Then another kick to the markets came on Wednesday when Target another US retail giant reported a massive loss in profits due to an overstock of supply. Basically Target purchased a lot of stuff thinking that people would buy but discretionary spending is down because of inflation leading to an overstock.
Now if you’ve been watching the charts you’ll know the real dip – the dip of the dip – if you will came on Thursday that’s because the jobless claims in the United States came in well below expectations which would normally be a good thing, but in the current financial system it’s the worst news in the world. That’s because the federal reserve is tasked with doing two things keeping inflation under control and ensuring that employment is strong.
Confirmation that employment is strong at least on paper gives the Fed the wiggle room it needs to keep raising interest rates to fight inflation lo and behold one of the Fed’s officials came out shortly afterwards to confirm that the central bank would continue to hike interest rates aggressively in September leading to a massive dip across the board as investors price in future pain.
Then as a poisoned cherry on top SEC chairman Gary Gensler published an opinion piece in the Wall Street Journal which confirmed that the infamous regulator will continue to crack down on the industry.
Never mind the possibility of Celsius starting to sell some of the BTC its mind as part of its bankruptcy process.
So this begs the question of whether last week’s dip was a correction or the beginning of new lows. So far it looks like it was a standard dip and we’ll know for sure later this week when a bunch more macro factors occur that could make or break the crypto market.