Bitcoin Dips to $53K and Ether Falls for 2024 as Market Panic Intensifies

A broad selloff in the cryptocurrency market intensified on Sunday evening during U.S. hours, causing Bitcoin (BTC) to drop to levels not seen since February and Ether (ETH) to fall to prices last observed in December.

In the past 24 hours, Bitcoin has plummeted 12% and is down 20% week-over-week. Ether has experienced a steeper decline, down 21% in the last 24 hours and 30% over the past week, erasing all its year-to-date gains and showing a 3% loss since January 1. The catalyst for this significant correction in both crypto and traditional markets may be the Bank of Japan's recent interest rate hike. The move sent the yen soaring and led to a sharp decline in the Nikkei stock index, which has fallen 6% early Monday and is now down about 15% over the past three sessions and 20% from its mid-July peak.

This turmoil in Japan has affected the U.S. markets, with the Nasdaq sliding more than 5% during the last two sessions of the previous week. Nasdaq futures were down 2.5% in Sunday evening trading.

Compounding the issue, the U.S. Federal Reserve surprised some market participants not by keeping rates steady but by signaling uncertainty about a rate cut in September, which many had expected to be certain. Markets are now pricing in a 100% chance of a rate cut in September, with a 71% probability of a 50 basis point reduction and a 29% chance of a 25 basis point cut.

On the longer end of the maturity curve, the U.S. 10-year Treasury yield has dropped to 3.75% as of Sunday evening, down from 4.25% a week ago and significantly lower than the current fed funds target range of 5.25%-5.50%.