More than $1 billion was liquidated from the crypto-leveraged market as Bitcoin price teased below $50K for the first time since February.
Bitcoin (BTC) price led the entire crypto industry in heavy losses in the past 24 hours. The flagship coin dropped over 12 percent during the early Asian session to trade at about $52,961 at the time of this writing.
The total crypto market cap slipped more than 16 percent in the past 24 hours to hover around $1.87 trillion on Monday during the mid-European session. According to the latest crypto market data, Ethereum price led the altcoin industry with a decline of more than 21 percent in the past 24 hours.
As a result, more than $1 billion was liquidated from the leveraged crypto market, mostly involving long traders. As for Bitcoin traders, more than $363 million was rekt in the past 24 hours.
Top Reasons Why Bitcoin Price Dropped Today
Bitcoin price and the entire crypto industry have been following the general expected monthly performance, whereby August and September are deemed bearish. However, today’s Bitcoin drop, which is akin to the post-FTX crypto crash, was triggered by the poor performance of the Japanese stock market.
Japan’s NIKKEI 225 Index dropped 12.4 percent on Monday to trade at about 31,458 before the market closed. The Asia Dow Index USD had dropped nearly 7 percent at the time of this writing to hover about 3,693.
Almost all of the European stock index has dropped more than 2 percent in the past few hours. The US stock indexes are also expected to fall after the market opens later today.
Notably, Robinhood Markets Inc (NASDAQ: HOOD), which has seen its stock market plunge over 20 percent since Friday, halted its 24-hour trading in fear of a liquidity crisis.
Already, billionaire Warren Buffett has liquidated a significant portion of his stock portfolio and currently holds more cash than Ethereum’s market cap.
🚨 BLACK MONDAY MELTDOWN
The Situation:
Global financial markets are in turmoil, triggered by the Japanese carry trade, leading to a historic sell-off.
Key Points:
– Japan’s Nikkei 225: A staggering 18.2% drop in two days, including a 12.4% plunge today.
– US Markets: $7… https://t.co/23CWaXpUi7 pic.twitter.com/JrMYcnAJyq
— Mario Nawfal (@MarioNawfal) August 5, 2024
Meanwhile, the US spot Bitcoin ETFs closed last week with a net cash outflow of about $80 billion, thus ending the winning streak for the prior four weeks.
Is the Crypto Bull Cycle Over?
As the BTC price teased below $50K for the first time since February, Bitcoin’s fear and greed index dropped below 26, signaling extreme fear, the question of whether the crypto bull market is over continues to linger among most traders.
However, historical data shows that Bitcoin price experienced major corrections before entering its parabolic phase of the bull cycle.
If Bitcoin price follows historical trends, a V-shaped rebound could happen in the fourth quarter.
Moreover, Bitcoin price has a robust support range between $47K and $50K, which could offer a needed lifeline to the bullish sentiment.
Notably, the US Fed is expected to initiate much-anticipated interest rate cuts as early as next month, ahead of the upcoming general elections.
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