Stock Market Crash Sparks Massive Crypto Sell-Off: What to Expect Next?

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The devastating impact of the August 5 stock market crash on the crypto industry is still fresh in most traders. The mixed reactions to the anticipated interest rate cuts in the United States on September 18 are evident in the crypto and stock industries. 

Furthermore, historical data reveals that September is a choppy month for the entire crypto industry in addition to the stock sector. With the positive correlation between the stock market and the crypto industry, it is prudent to keep a close eye on both sectors for interpretation of midterm price action.

Heavy Stock Market Losses Wipe Out $1 Trillion

In the wake of the fourth day of September, major global stock indexes – led by Nikkei 225, Asia Dow, and S&P 500 -were bleeding out. In the past 24 hours, the stock market erased $1.05 trillion led by semiconductor-related companies such as AMD and Nvidia Corp.

As Coinpedia reported, the US DoJ filed a subpoena to Nvidia Corp and other companies in light of alleged violations of antitrust laws. 

The stock’s bearish outlook is expected to continue in the coming weeks as investors’ confidence drastically declines.

Crypto Market Falls in Tandem

The crypto market has in the past few days accelerated the August sell-off led by Bitcoin (BTC). In the past 24 hours, the total crypto market cap slipped over 6 percent to hover about $2.07 trillion on Wednesday during the early London session.

Bitcoin price has fallen below crucial support levels and has signaled a further decline in the midterm towards $54k. The AI-related crypto tokens were the most heavily impacted by the stock market crash amid heightened speculation.

Silver Lining

Despite the notable decline in demand for the US-based spot Bitcoin and Ether ETFs, experts believe a market rebound is around the corner. The US Fed could initiate the first interest rate cuts on September 18 depending on the upcoming CPI and employment data. 

Meanwhile, the supply of the stablecoin has gradually been rising amid the notable decline in Bitcoin’s supply in centralized exchanges. As a result, there is a high likelihood of a major bull market in the fourth quarter, which could extend into the first half of 2025.