The post Why Crypto Market is Down Today? September Capitulation and ETF Cash Outflows appeared first on Coinpedia Fintech News
The crypto market cap continued to shrink in the past 24 hours, led by Bitcoin (BTC) and AI-related tokens. According to the latest crypto oracles, Bitcoin (BTC) price dropped more than 4 percent in the past 24 hours to reach a daily low of around $55,746 before rebounding to about $56,623 on Wednesday during the early European session.
The altcoin industry, led by AI-related crypto projects, registered palpable losses of over 7 percent in the past 24 hours. As a result, nearly $200 million was liquidated from the crypto-leveraged trading, mostly involving long traders.
Factors Driving the Crypto Crash
Rising Fear of September Capitulation
After closing August with a bearish outlook, the crypto industry has confirmed the macro correction that began in early March. From a technical standpoint, Bitcoin price has been forming lower highs and lower lows in the past five months, thus suggesting the bears are in control.
Bitcoin’s fear and greed index continued to hover below 30 percent, suggesting heightened fear of further capitulation in the near term. Furthermore, historical data shows that Bitcoin and the entire crypto industry performed poorly in September, especially after the BTC halving event.
Impact of Stock Market Selloff led by Nvidia
The crypto market took a hit in the past 24 hours as major stock indexes – led by Japan’s Nikkei 225, Asia Dow, S&P 500, and the Nasdaq Composite Index, among others – registered notable losses in the past 24 hours.
As Coinpedia reported, the notable single-day losses registered by Nvidia, following the regulatory headwinds, have significantly impacted the crypto market, especially AI-related projects.
Low Demand for Spot BTC and Ether ETFs
The demand for the US-based spot Bitcoin and Ethereum ETFs has remained low in the past few weeks. The US spot Bitcoin ETFs had their worst day selloffs on Tuesday, with a net cash outflow of around $287 million led by Fidelity’s FBTC.
As a result, the US spot BTC ETFs have now registered five consecutive days of notable cash outflows.
Meanwhile, the US-based spot Ether ETFs registered a net cash outflow of about $47 million on Tuesday.