Crypto Blog
The ongoing turmoil in the Japanese and United States stock markets has triggered heightened volatility in the crypto space. This highlights the interconnectedness of global markets and Bitcoin’s growing correlation with traditional finance markets.Economic and political developments exerting influence across all markets have triggered a broader instability that saw the Japanese stock market Topix index record its most significant two-day decline since the 2011 tsunami. The index has fallen 9.
Bitfinex revealed that the Bank of Japan’s unexpected rate hike on Wednesday and Governor Kazuo Ueda’s hawkish tone triggered the downturn that has caused one of the world’s top-performing markets to witness a significant correction. Likewise, Wall Street’s losses kicked off on Friday, with U.S. equities and Treasury yields plummeting to multi-month lows following a disappointing jobs report, concerns about the Federal Reserve delaying interest cuts, and fears of an economic slowdown. The S&P 500 has closed three consecutive weeks in the red for the fourth time since the 2022 bear market lows.
“Since BTC and the SPX have experienced positive correlation since mid-July, we expect the oscillating nature of the correlation to play out and the correlation across risk assets to increase moving forward. However, if the stock market continues to be plagued by downside, it is increasingly likely that BTC might continue to face downward pressures in such a scenario,” the report stated.
Altcoins are already down significantly, with Solana leading the plunge with a weekly decline of 28% and a peak-to-trough fall of 43%. Others are experiencing severe volatility and market cap erosion. Bitfinex has urged investors to exercise increased caution because some altcoins may not survive the market correction.from the crypto market in the last day or so due to the rapid price decline, with $982.4 million and $180.51 million in long and short liquidations, respectively.
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