The cryptocurrency market on August 22 declined due to positive US PMI data and tightening signals from the Fed, reducing expectations for interest rate cuts in September.
Bitcoin and Ethereum both dropped sharply, while some tokens like Toncoin, SKALE, and the SocialFi group had slight increases. The CeFi and PayFi segments are under selling pressure, while a few special coins like OKB, HT, and ULTIMA have made impressive breakthroughs.
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Bitcoin fell by 1.54% to below $113,000, while Ethereum decreased by 1.80 around $4,200.
The CeFi and PayFi segments both decreased while SocialFi and Toncoin saw slight increases.
OKB and HT surged by 29.43% and 292.01% respectively, while ULTIMA increased by 19.17% on the day.
How did the cryptocurrency market react on August 22 to US PMI data?
The cryptocurrency market is negatively impacted by better-than-expected US PMI reports, along with hawkish remarks from Federal Reserve officials, reducing the likelihood of interest rate cuts in September.
This data has made investors concerned about the possibility of tightening US monetary policy, exerting downward pressure on major coins. Bitcoin fell about 1.54% to below $113,000, and Ethereum also lost 1.80%, closing around $4,200.
The event shows the sensitive relationship between US economic data and cryptocurrency trends, requiring investors to closely monitor macroeconomic indicators.
Which cryptocurrency segments performed prominently that day?
Despite the broader market decline, SocialFi continued to rise slightly by 0.73%, indicating stable interest in decentralized social platforms.
Toncoin demonstrated good resilience, increasing by 1.92%, while SKALE saw notable increases of 3.37%, 3.94%, and 10.86% in Layer 1, DeFi, and Layer 2 groups respectively. This proves that Layer 2 solutions and DeFi projects still attract capital in a volatile market.
Why did some coins like OKB, HT, and ULTIMA rise sharply while the broader market declined?
Under the general pressure of the market, coins like OKB and HT still had exceptional spikes, reaching 29.43% and 292.01% respectively. ULTIMA also recorded a 19.17% increase on the day.
There is currently no specific information regarding the cause of this event; however, it may be due to internal news, technological updates, or supportive actions from exchanges and the community. This is a common phenomenon in the cryptocurrency market when some tokens have rare liquidity and are highly volatile.
The Federal Reserve on August 22 stated: Monetary policy still needs to be tightened further to control inflation, which reduces the outlook for interest rate cuts in the coming quarter.
Federal Reserve, August 22, 2024
A brief analysis of the impact of PMI data and the Fed on cryptocurrency investor sentiment
US PMI data better than expected shows the economy remains strong, however, the Fed's tightening signals create a counter sentiment for cryptocurrencies – which are sensitive to interest rates and global risks.
As expectations for interest rate cuts diminish, investment capital shifts to safer assets, reducing demand for risky assets like cryptocurrencies. This explains the overall decline of Bitcoin, Ethereum, and some DeFi, Layer 1 groups.
Which major cryptocurrency groups dropped sharply?
CeFi and PayFi are two segments that lost heavily, decreasing by 2.32% and 2.86% respectively. Additionally, Meme coins also faced a decline of 3.13%, with some projects like Pump.fun dropping by as much as 7.38%.
This reflects investor caution in light of the possibility of sustained high interest rates, directly impacting centralized financial projects and speculative tokens like Meme coins.
Notable figures on price volatility in Layer 1, DeFi, and Layer 2 groups
Overall, the three groups Layer 1, DeFi, and Layer 2 all fell by about 3.17%, but there were still some notable increases, such as SKALE rising by 3.37%, 3.94%, and 10.86% in the group.
This shows a clear differentiation in the market, with projects that have strong technological foundations or developed ecosystems still being highly valued and attracting capital inflows.
Frequently Asked Questions
1. How does US PMI data affect the cryptocurrency market?
US PMI reflects the health of the economy, when higher than expected can lead to the Fed tightening policy, negatively impacting cryptocurrency prices due to increased capital costs.
2. Why did Bitcoin and Ethereum both decline on this day?
Hawkish remarks from the Fed along with positive PMI data have reduced expectations for interest rate cuts, causing significant selling pressure on major coins.
3. How is the SocialFi and Toncoin group developing?
SocialFi increased by 0.73% and Toncoin rose by 1.92%, confirming the appeal of decentralized social platforms amid market volatility.
4. Why did OKB and HT rise sharply while the broader market declined?
Price fluctuations are mainly due to news or internal moves, as well as low liquidity making these coins prone to sudden price spikes.
5. How are CeFi and PayFi affected in this decline?
Both CeFi and PayFi groups decreased by 2.32% and 2.86% respectively, reflecting high risk in centralized financial projects as monetary policy tightens.
Source: https://tintucbitcoin.com/socialfi-tien-dien-tu-tang-gia-noi-bat/
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