Intensified Cryptocurrency Selloff Amid Global Market Turmoil

Weekend Cryptocurrency Selloff Intensifies

A significant selloff in the cryptocurrency market unfolded over the weekend, accelerating during the evening hours on Sunday in the U.S. This turmoil has driven bitcoin (BTC) to a price point not seen since February, while ether (ETH) has returned to levels last observed in December. The volatility has sent shockwaves through the market, with bitcoin experiencing a sharp decline of 12% over the past 24 hours, and a staggering 20% drop on a week-over-week basis.

Ether (ETH) has been even more affected, plummeting 21% over the last 24 hours and 30% over the past week. This dramatic drop has erased all of its year-to-date gains, leaving it approximately 3% lower since the beginning of the year. The broader CoinDesk 20 Index has also felt the impact, showing a decline of 12% in just the last 24 hours.

The catalyst for this significant correction in both the cryptocurrency and traditional financial markets may very well be attributed to the recent actions of the Bank of Japan. Last week, the central bank raised its benchmark interest rate, which led to a swift appreciation of the yen. Consequently, this monetary tightening has had a detrimental effect on Japan’s Nikkei stock index, which has already fallen by around 15% over the past three sessions and is down approximately 20% from a peak reached in mid-July.

The negative sentiment originating from Japan has spilled over into the U.S. markets. Last week, the Nasdaq composite index dropped more than 5% in its final two trading sessions. As of Sunday evening, Nasdaq futures have indicated a further decline of 2.5%, suggesting that the market may not stabilize just yet.