Source: CoinWorld
Author: Web3 Sniffing Observation
The cryptocurrency market staged an " 815 " plunge mode. At 14:30 on August 5 , the price of Bitcoin ( BTC ) once again hit a new low, falling below $ 49,000 for a short period of time, with a 24 -hour drop of 18.5% . Ethereum ( ETH ) experienced its worst single-day drop since May 2021 , with a daily plunge of 22.5% . The current price is $ 2,278 . The price of ETH has fallen back to the level at the beginning of the year, which is equivalent to the starting price of the K- line on January 1 , the beginning of the year, wiping out all gains this year.
In addition, according to the market data of Bijie.com, the top 100 cryptocurrencies in the cryptocurrency market, except for stablecoins, fell overall, with the highest single currency falling by more than 29% and the overall decline exceeding 19% . At the same time, the total market value of cryptocurrencies fell below $ 1.9 trillion, evaporating 17% in 24 hours.
(Screenshot from Bijie.com)
Black Monday, a global asset liquidation. Japan's Topix index plummeted 12.2% , the largest single-day drop since the 1987 crash. The global capital market is expected to stage a Black Monday. According to market data, US stock index futures plummeted, with Nasdaq futures down 5% , S&P 500 futures down 2.6% , and Dow futures down 1.22% .
Summary of the main reasons for the crypto market sell-off
The sell-off in the cryptocurrency market was mainly triggered by the following factors:
Weak employment data: The employment data released by the United States was lower than expected, increasing market concerns about an economic recession.
Major tech stocks slowed: Several big companies, including Microsoft and Intel, reported second-quarter results that missed expectations, and market leader Nvidia was also hit hard in anticipation of an upcoming interest rate cut in September .
Jump Crypto ’s sell-off: According to Arkham Intelligence , Jump Crypto has sold hundreds of millions of dollars of assets from its books over the past few days, further exacerbating the selling pressure in the market.
Middle East tensions: The United States informed the G7 that Iran could attack Israel within 24 hours, a news that caused panic in the market.
The sharp sell-off in Bitcoin and the broader cryptocurrency market was sparked by a broader sell-off in financial markets, as fears of a global recession and rising tensions in the Middle East sent investors into a state of panic, leading to massive outflows.
Additionally, the Crypto Fear and Greed Index has fallen back into the “ fear ” state, showing a score of 26 at press time, which indicates that market sentiment is very pessimistic.
Is the cow still there?
Cryptocurrency markets are set to have another tough week, with much of the losses to be recouped by increased spot and derivatives trading activity from traditional financial institutions.
On August 5 , Galaxy CEO Mike Novogratz wrote on the X platform that Japan's interest rate hike triggered global risk aversion. This indicates that the market may continue to fluctuate in the short term.
10x Research analyst Markus Thielen predicted the plunge on August 3. He pointed out that the U.S. economy has performed weaker than the Fed expected in the past 48 hours, and the weak ISM index has hit risky assets. The Fed hinted that a rate cut in the fall would not stop the economic downturn. If the stock market follows the downward trend of the ISM manufacturing index and even begins to anticipate the arrival of a recession, stocks may fall sharply in the coming quarters. In this case, Bitcoin may suffer a sharp sell-off, and its price may fall below $ 50,000 or even lower.
Dan Dolev , senior analyst at Mizuho Securities, said that Bitcoin is not yet the safe-haven tool that people hope for. If the unemployment rate rises and people lose their jobs, investors will have to cash out their tokens. This also means that Bitcoin may be at risk of falling again.
In the past week, the crypto market has experienced the largest sell-off in nearly a year. Bitcoin fell from $ 70,000 to $ 49,000 , Ethereum fell from $ 3,300 to $ 2,100 , and the entire crypto market value fell by nearly $ 500 billion. Although the market outlook is unclear in the short term, in the long run, the crypto market is still expected to benefit from future monetary easing policies.
In the long run, as the Federal Reserve begins to cut interest rates, the United States is about to start a new round of monetary easing. As more and more US dollars enter the capital market, the crypto market will also rise. Even if the US economy really enters a recession, the US government's final choice may only be further monetary easing. Therefore, in the long run, the prospects of the crypto market are still promising.
Investors should pay close attention to market dynamics and macroeconomic indicators and make rational investment decisions. At the same time, they also need to be prepared to deal with further market volatility and uncertainty.
