Bitcoin and Ethereum Values Plummet Amid US Services PMI Uptick and Crypto Liquidation Exceeding $1 Billion

• The global selloff in the stock and crypto markets saw a glimmer of hope with the latest US Services PMI data, indicating potential economic resilience.
• The US Services PMI reading for July stood at 51.4%, marking a steady expansion that calmed fears of a looming recession.
• This data point highlighted an optimistic turnaround after significant market declines, suggesting potential stability in the services sector.

US Services PMI Data Brings Optimism Amid Market Selloffs

Steady Expansion in July’s US Services PMI Reading

Amid a backdrop of global market turbulence, the latest US Services Purchasing Managers’ Index (PMI) data offered a breath of fresh air. The PMI reading registered an upbeat 51.4% for July, surpassing the expected 51.0. This indicates a slow but steady expansion in the sector, bringing a sense of calm in a period marked by upheavals in both stock and crypto markets.

Recovery in Key Services Metrics

The rise in the US Services Index, as reported by the Institute for Supply Management (ISM), showcases not only sectoral growth but also improvements across other critical metrics. For instance, new orders rebounded significantly from 47.3% to 52.5%, business activity saw an uptick from 49.6% to 54.5%, and order backlogs increased from 44% to 50.6%. This comprehensive recovery paints a brighter picture of the services sector’s resilience amidst broader economic concerns.

Investor Sentiments and Market Reactions

Despite the encouraging PMI data, the stock market experienced considerable selloffs earlier in the day, triggered by fears of an economic recession. The reaction underscores the market’s sensitivity to economic indicators and investor sentiment. Chris Shipley, co-chief investment officer at Fort Washington Investment Advisors, emphasized that the current downturn should be seen as a temporary setback, rather than a cause for panic. According to Shipley, the market’s vulnerability is tied to broader expectations around economic growth and inflation control.

Impact on the Crypto Market

The turbulence wasn’t confined to traditional markets; the crypto market also faced significant liquidations, with over $1 billion wiped out in just 24 hours. This includes approximately $900 million in long liquidations and $106 million in short liquidations. Major cryptocurrencies like Bitcoin and Ethereum witnessed stark declines, reminiscent of the market fallout following the collapse of FTX in 2022. Analysts noted that Bitcoin’s latest selloff is one of the worst in recent memory.

Conclusion

The latest US Services PMI data offers a ray of hope amid the widespread market selloffs, suggesting that the services sector remains resilient. While the stock and crypto markets have faced substantial turbulence, the positive PMI reading indicates potential stability that could mitigate recession fears. Investors are advised to stay informed and approach market movements with a level-headed perspective, considering both immediate data and long-term trends.