Bitcoin Cash (CRYPTO: BCH) is trading lower by some 8.78% to $303.36 Monday afternoon. Several altcoins are reversing higher late Monday amid significant volatility in global markets.
The initial drop in Bitcoin Cash likely resulted from a widespread panic in global markets, triggered by the 13% overnight tumble of Japan's Nikkei 225 and the anticipation of a "Black Monday" on Wall Street. This kind of market-wide volatility often leads to a sell-off in riskier assets like cryptocurrencies as investors seek safer investments.
Before the release of ISM data, there was heavy speculation about a potential intra-meeting interest rate cut by the Federal Reserve. Such speculation increases uncertainty, contributing to market volatility and affecting assets like Bitcoin Cash. The possibility of a significant rate cut would typically cause the dollar to weaken and might initially drive money away from speculative assets into safer havens.
Cryptocurrencies like Bitcoin Cash are also highly sensitive to investor sentiment and speculative trading. The initial drop could have been driven by knee-jerk reactions to the broader market sell-off, while the subsequent recovery might have been fueled by bargain hunters and speculative traders taking advantage of the dip.
Read Also: How To Navigate Market Volatility: 5 ETFs That Strengthen Your Portfolio During Stock Turmoil