Bitcoin’s price dipped below $50,000 for the first time since February, reaching a low of $49,351 before making a recovery to around $51,000. As a result, the original coin’s dominance rose to 58% as both the altcoin and stock markets collapsed, wiping out over 17% of the total cryptocurrency market capitalization.
The total market cap, which stood at roughly $2.16 trillion last month, fell to around $1.76 trillion as of writing.
“The sudden move downwards in Crypto prices since the start of August was something our Algorithm anticipated, moving from a bullish stance of BTC and ETH to a bearish one,” said Tom Cohen, Head Trader at Algoz Technologies.
“Fed Chairman Jerome Powell signalled that rate cuts are coming, normally good news but the market interpreted this, on the back of weak economic data, as the US slipping into recession and traditional markets are now looking at big losses today.”
Some crypto experts predict that the recent declines in Bitcoin’s price could be the beginning of a more dramatic fall, citing a looming economic storm and a decoupling of cryptocurrency from the broader stock market.
Tristan Dickinson, CMO exSat Network, told Investing.com that Bitcoin isn’t immune to global macro events.
“The capitulation of Japanese markets (Nikkei down by 12%) has combined with poor performance of the Dow Jones, S&P 500, Nasdaq and extends a broader sentiment of global fears of recession.”
Tristan believes that “pullbacks are inevitable,” and if Bitcoin is able to hold above 50k then this could usher in the start of a bull market. “But caution is needed, August and September are historically poor months, so expect sideways action and further testing of Bitcoin support levels,” he added.
Ethereum also plummeted, losing almost 25% of its value in just two hours, its worst single-day hit since May 2021. At the time of writing, ETH was trading at around $2,190, recovering from a low of $2,170 earlier in the day. Binance Coin and XRP saw declines of more than 10%.
The sell-off only got worse on rumors of a major crypto market maker liquidating assets after massive Ether transfers to centralized exchanges.
The panic selling in Bitcoin and the overall crypto market was spurred by a broader fall in financial markets due to fears of a global recession and rising tensions in the Middle East. Japan’s Nikkei 225 Index dropped 12.4%, the Stoxx Europe 600 Index fell 2.8%, and micro futures on the S&P 500 Index lost by 2.9%.
Solana and Dogecoin were the biggest losers among the top 10 cryptocurrencies by market cap. Solana fell nearly 28% over the past week to $133, while Dogecoin dropped about 23% to just under $0.10.
The latest wave of market declines was worsened by a disappointing U.S. jobs report on Friday. This report triggered fears of a recession, impacting the stock market before the weekend.
Source: Cryptocurrency - investing.com
