The cryptocurrency market signals a prolonged correction for September as Bitcoin price shows sustainability below $60,000. Following Wednesday’s crypto market crash, American television personality Jim Cramer shared his opinion on sector-focused sell-offs, highlighting the struggles within these industries rather than indicating a broader economic decline.
Jim Cramer Says ‘It’s Not a Market-Wide Sell-Off’
As both the traditional and crypto market crash continue to deepen, the host of Mad Money on CNBC, Jim Cramer, has said the current downturn is not a market-wide sell-off but rather, a sell-off of only AI, data center, and computing sectors.
It’s not a market-wide sell-off at all. It is a sell-off of anything having to do with AI/data center/computing as well as housing and oil and some companies leveraged to infrastructure
— Jim Cramer (@jimcramer) September 4, 2024
This comes after the stock of NVIDIA, the largest chip manufacturer in the world, fell almost 10% amid reports that the U.S. is ramping up an antitrust investigation against the company. Consequently, crypto Artificial Intelligence (AI) tokens took a hit, with the sector’s total value dropping by 7.3% in the last 24 hours, according to crypto price tracking website CoinGecko.
Stocks of crypto miners that use computer chips from NVIDIA also saw a drop in price. Cipher Mining (CIFR), CleanSpark (CLSK), Marathon Digital (MARA), and Riot Platforms (RIOT) dropped by 0.4%, 2.2%, 2.2%, 1.7%, and 1.0%, respectively, in premarket U.S. trading on Wednesday as the Bitcoin price reached a one-month low.
Additionally, shares in crypto-exposed digital coin exchange platform Coinbase (COIN) fell by 0.4%. The crypto market crash resulted in a drop in the total crypto market cap to below $2 trillion. It has since resurfaced, although barely holding up.
August NFP Data May Shed Light on FOMC Approach
The crypto market eagerly awaits the release of the August nonfarm payrolls on Friday. Analysts expect the data to come in higher than the previous 114,000. The US Manufacturing Purchasing Managers’ Index (PMI) for August came in at 47.9, down from July’s 49.6. This reading is also the lowest in the last eight months and may have contributed to the current state of both traditional and crypto markets.
If the NFP data exceeds expectations, it would indicate a stronger U.S. job market, potentially supporting the anticipated 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 respond positively in the days leading up to the meeting.
Frequently Asked Questions (FAQs)
The crypto market crash on September 4, 2024, was triggered by a sharp drop in Bitcoin’s price, which briefly fell below $55,000. This resulted in $199 million in liquidated leveraged positions across 75,487 traders. The largest liquidation was a $2.94 million loss on the ETH/USDT pair on Binance. Overall, the crypto market fell by 5.1%
Crypto AI tokens were severely impacted, with the sector’s total value declining by 7.3%. This drop was linked to the broader sell-off in AI-related sectors, particularly after NVIDIA’s stock fall. Stocks of crypto miners reliant on NVIDIA chips also saw losses.
Jim Cramer believes that the sell-off is not market-wide but rather focused on sectors like AI, data centers, and computing. He emphasized that the crash isn’t necessarily a full-blown market collapse but rather a sector-specific downturn.
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Evans Karanja
Evans Karanja is a content writer and scriptwriter with a focus on crypto, blockchain, and video gaming. 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 crypto trader and investor, and he believes that blockchain will revolutionize many industries in the years to come. When he is not writing, you can find him playing video games or chasing waterfalls.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/jim-cramer-explains-why-crypto-market-is-crashing/
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