Today (Monday) the cryptocurrency market is experiencing one of the biggest sell-offs in recent months, testing levels not seen since early 2024. Bitcoin (BTC) has lost 25% of its total value in just 4 days, down $320 billion. The rest of the crypto market has lost almost as much.
Bitcoin and Cryptocurrencies Face Biggest Selloff in a Year
Bitcoin price is down nearly 14% during Monday’s session, testing levels below the $50,000 psychological support. This is the lowest BTC price since February and marks the fourth day of very strong selling pressure.
In total, the price has fallen by 25%, or about $16,000. In dollar terms, $320 billion has evaporated from the Bitcoin market since last Friday, wiping out the value that crypto bulls had painstakingly built up earlier in the year.
BREAKING: #Bitcoin falls below $50,000 pic.twitter.com/11og9GoSyi
— Bitcoin Magazine (@BitcoinMagazine) August 5, 2024
The BTC sell-off also led to huge losses in altcoins, with the total sell-off reaching $600 billion. This is the largest outflow of digital assets in the last year.
According to experts and analysts, the main reason for the sharp change in sentiment towards Bitcoin, Ethereum and major altcoins is the deterioration of the stock market, with which digital assets are closely correlated.
A recent report from 10x Research suggests that #Bitcoin price could fall below $50,000 due to #US economic uncertainty, which would impact the entire #cryptocurrency market.
The decline in the ISM manufacturing business activity index signals possible sharp corrections for Bitcoin and a 20% drop in the S&P 500 index.
… pic.twitter.com/xWk8e04mPG
— TOBTC (@_TOBTC) August 5, 2024
The S&P 500, for example, lost nearly 2% last Friday to hit a two-month low of 5,346. The tech-heavy Nasdaq fell even further, testing levels last seen in May.
“The broader digital token space follows sharp losses in global equity markets amid concerns about a slowing U.S. economy, fueling speculation about an emergency rate cut by the Federal Reserve,” said Arthur Firstov, chief business officer at Mercuryo, a provider of cryptocurrency payment infrastructure. “Panic has gripped crypto markets as participants have seen waves of selling pressure.”
The sharp decline in the US stock market was not only caused by local economic data and concerns about the future monetary policy of the Federal Reserve (Fed), but also by a collapse in global stock markets. Global concerns were driven by the Japanese market, where the Nikkei index lost 20% in three days. The decline on Monday exceeded 10%, pushing the Tokyo Stock Exchange benchmark to its lowest level since November 2023.
$1 Billion in Long Leveraged Positions Disappears from the Market
The scale of losses in the cryptocurrency market and the funds actually lost by investors are also evidenced by data on the cost of liquidating long credit positions.
CoinGlass The data shows that liquidation of long positions in the last 24 hours has reached almost $1 billion. $406 million in long positions disappeared from Bitcoin derivatives, and another $370 million from long Ethereum positions.
As for #Bitcoin, this thing is beautiful. It’s a ghost town in the longs due to the cleanup of a nuclear incident. The shorts are piling up and will eventually have the same faith. #cryptocrash #crypto #bitcoin pic.twitter.com/JUm8rKZU3V
— Kackbyll (@Kackbyll1) August 5, 2024
Digital asset companies, including Wall Street’s public bitcoin miners, are also taking a hit from the cryptocurrency’s dramatic decline. Shares of Marathon Digital Holdings, the largest BTC miner on the Nasdaq, fell more than 5% on Friday to test May levels. The decline is more than 20% in just one week. The company’s shares were earlier hit by news of a $138 million fine imposed on it.
