
The cryptocurrency market took another hit on Sept. 3, with the total market capitalization dropping by over 1.5% to about $2.03 trillion. This plunge has left many market participants questioning the core catalysts behind this downturn, and how much longer it may continue.
24-hour performance of large-cap cryptocurrencies. Source: Coin360
Let’s look at the factors driving the crypto market down today.
Cryptocurrency prices dive on weak manufacturing data
The crypto market is selling off, mirroring the weakness witnessed in US equities with the with the S&P 500 seeing its worst slump since the Aug. 5 market meltdown.
The S&P 500 was down 1.8% two hours after the Wall Street open on Sept. 3, while the Dow Jones indeed was down 563 points, or 1.4%. The Nasdaq Composite index slid 2.9%.
Similarly, crypto prices flashed red, with Bitcoin (BTC) dropping 1.6% over the last 24 hours to trade at $57,713 at the time of publication. Ether (ETH) was down 3.4% to $2,441.
The correction in equities and digital assets followed yet another weak Supply Management (ISM) manufacturing survey, though stocks were already falling prior to the print. The market may have been poised for a correction after displaying strength toward the end of August.
“US manufacturing has officially contracted for the 5th consecutive month, to 47.2 points,” declared capital markets commentator the Kobeissi Letter in a Sept. 3 post on the X social media platform.
The ISM survey on Sept. 3 showed that the PMI index missed expectations of 47.5 points for August. New orders fell to 44.6 points from 47.4 in July, experiencing contraction for the 3rd straight month.
Source: Institute for Supply Management
These prints implied that the US supply market is actually weaker than expected, with rising expectations that the Federal Reserve will cut rates in its next FOMC meeting.
The debate now is on the size of that Fed cut – with futures markets convinced of at least a quarter-point move on Sept. 18 and pricing about a 37% chance of a larger reduction of 50 basis points, according to the CME FedWatch tool.
arget rate probabilities for the September Fed…..