The fall in the total market capitalization of cryptocurrencies on Thursday can be attributed to a number of potential factors.
Firstly, there is the bearish close of the S&P 500 (SPX), which decreased by 0.33%. This continued the drop that has been ongoing since Aug. 15, which has seen the index fall by 17.50%.
Due to the nearly perfect correlation (blue) between SPX and Bitcoin, a fall in the former usually causes a decrease in the latter.
A more important factor could be the Consumer Price Index (CPI) reading, which came at 8.20%, slightly higher than the expected rate of 8.10%.
It is possible that this will be the catalyst for a further rate hike, hence leading to investor panic. However, it is worth noting that the rate was lower than the previous CPI reading of 8.30%.
GIPHY App Key not set. Please check settings