The cryptocurrency market is predicting a prolonged correction for September, with Bitcoin price showing stability below $60,000. Following Wednesday’s stock market crash, American TV personality Jim Cramer shared his thoughts on the concentrated sell-off in certain sectors, highlighting the struggles of these industries rather than indicating a broader economic decline.
Jim Cramer says: ‘This is not a market-wide sell-off’
As the crash in traditional and crypto markets continues to worsen, CNBC’s Mad Money host Jim Cramer said the current downturn is not a market-wide sell-off, but rather a sell-off in just the AI, data center and computing sectors.
This is not a market-wide sale. This is a sale of everything related to AI, data centers and computing, and housing and oil and some infrastructure-related businesses.
— Jim Cramer (@jimcramer) September 4, 2024
The drop comes after shares of NVIDIA, the world’s largest chipmaker, fell nearly 10% on reports that the United States is stepping up an antitrust investigation against the company. As a result, crypto artificial intelligence (AI) tokens have been hit, with the sector’s total value falling 7.3% in the past 24 hours, according to cryptocurrency price tracking website CoinGecko.
Shares of cryptocurrency miners that use NVIDIA computer chips also saw their prices fall. Cipher Mining (CIFR), CleanSpark (CLSK), Marathon Digital (MARA) and Riot Platforms (RIOT) fell 0.4%, 2.2%, 2.2%, 1.7% and 1.0%, respectively, in U.S. premarket trading on Wednesday, as the price of Bitcoin hit a one-month low.
Additionally, shares of crypto-exposed cryptocurrency exchange Coinbase (COIN) fell 0.4%. The crypto market crash caused the total crypto market cap to fall below $2 trillion. It has since rebounded, though it has barely held up.
August NFP data may shed light on FOMC approach
The cryptocurrency market is eagerly awaiting the release of the August nonfarm payrolls figures on Friday. Analysts expect the data to be higher than the previous figure of 114,000. The U.S. manufacturing purchasing managers’ index (PMI) for August came in at 47.9, down from 49.6 in July. This figure is also the lowest in eight months and may have contributed to the current state of traditional and cryptocurrency markets.
If the NFP figures beat expectations, it would indicate a stronger US jobs market, which could support the expected interest rate cuts at the upcoming FOMC meeting. However, weaker-than-expected data could shift Fed Chair Jerome Powell’s focus from controlling inflation to preventing job losses.
Analysts using the CMS FedWatch tool are confident that the Fed will cut rates by 25 basis points at the September 17-18 FOMC meeting. They expect the Bitcoin price to react positively in the days leading up to the meeting.
Frequently Asked Questions (FAQ)
The September 4, 2024, cryptocurrency market crash was triggered by a sharp drop in the price of Bitcoin, which briefly fell below $55,000. This led to the liquidation of $199 million in leveraged positions across 75,487 traders. The largest liquidation was a $2.94 million loss on the ETH/USDT pair on Binance. Overall, the cryptocurrency market fell 5.1%.
Crypto AI tokens were hit hard, with the sector’s total value falling 7.3%. This decline was linked to the broader sell-off in AI-related sectors, particularly after NVIDIA’s stock plunged. Shares of cryptocurrency miners that rely on NVIDIA chips also posted losses.
Jim Cramer believes that the price drop is not about the entire market, but rather about sectors such as artificial intelligence, data centers and computing. He stressed that the crash is not necessarily a general market collapse, but rather a sectoral slowdown.
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Evans Karanja
Evans Karanja is a content writer and scriptwriter specializing in cryptocurrencies, blockchain, and video games. He has worked with various startups in the past, helping them create engaging and high-quality content that captures the essence of their brand. Evans is also an avid cryptocurrency trader and investor, and he believes that blockchain will revolutionize many industries in the coming years. When he’s not writing, you can find him playing video games or chasing waterfalls.
Disclaimer: The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication does not assume any responsibility for your personal financial losses.
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