The U.S. economy and the market are in a dire state due to clashes from inside the state as well as from trade wars with China. The Dow Jones Industrial Average fell by over 350 points, which was followed by the dump of chip-making giant Nvidia and Caterpillar stocks.
On January 28, 2019, 17:30 US time, the Dow 30 Futures fell from 24,729 to 24,357, which is a decrease of 372 points.
The decrease in the Dow ignited the fall of Caterpillar, whose stocks plummeted by 8.25% at the time of writing.
The S&P 500 stocks also followed the same path as it slipped by 1.13% at the time of writing.
The reason for the plummet of the stock suddenly could be attributed to various reasons like the shutdown of the U.S. government due to lack of clarity on the funding for the wall.
Another speculated reason could be due to the trade wars between the U.S. and China which has caused countries around the world to stop investing in the U.S.’ Treasury bonds and securities.
Moreover, the reason that most of the analysts are attributing the crash of Dow to the interest rate hike by the Feds and the ever-rising debt, which is in trillions of dollars.
While the stocks of Nvidia, the chipmaker, whose GPU is used to mine the popular cryptocurrency, Bitcoin [BTC] also plummeted by 15.625% within hours and is currently trading at $135.61.
Nvidia’s CFO, Colette Kress said:
“Although crypto revenue may not be large, it still has a derivative impact on our stack in terms of what we are selling and to both replenish the overall channel and such.”
Although Bitcoin is an uncorrelated asset, the effects of the Dow’s plummet could be felt in the cryptocurrency realm as the Bitcoin prices plummeted from $3,549 to $3,409, which was a total decrease of approximately 4% at the time of writing.
Bitcoin broke two very important immediate support, one at $3,577 and the other at $3,498 causing it to nosedive further down as the only major and strong support that it can find is at $3,122. The current price of Bitcoin at the time of writing was at $3,410 with a market cap of $60 billion.
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