The global crypto market has seen a significant downturn, with its market cap dropping to $1.89 trillion, a 12.29 per cent decrease in just one day. Despite this, Bitcoin remains a strong player, maintaining a dominance of 56.56 per cent. Bitcoin also slipped below the $50,000 mark briefly, taking it to its lowest levels since February.
Gracy Chen, CEO of Bitget highlights the sharp declines in major cryptocurrencies over the past 24 hours, with Ethereum down by over 20 per cent and Bitcoin by 11 per cent. The derivatives market experienced significant liquidations, with $827 million, including nearly $720 million in long orders, being wiped out.
Chen also highlighted the global economic uncertainties claiming that recession fears are impacting investor sentiment. Another factor is trading losses in the US and Japan. Additionally, Berkshire Hathaway's large-scale stock sales and Jump Crypto's ETH sell-off. Chen notes that historically, the crypto market often undergoes sharp declines before a bullish drive, reducing long positions and selling pressure for future rises.
CoinDCX Market Movement team claims that the past four days have seen a 15-20 per cent drop in the crypto market, driven by significant declines in stock indices, Israel-Iran conflicts and sales of BTC by Genesis and the German government. Distributions from Mt. Gox. was also an important factor. They claim that negative sentiments still dominate the market.
CoinSwitch markets desk believes bitcoin's decline along with ether turning negative for 2024, reflects broader market concerns. The ongoing regulatory challenges and macroeconomic factors are reasons behind the steep decline. The price drop has led to the liquidation of $600 million in leveraged long positions, highlighting the risks of leveraged trading in crypto.
Edul Patel, CEO of Mudrex, claims Bitcoin's fall happened due to increased sell-offs and the Bank of Japan's rate hike, which strengthened the yen and dropped the Nikkei index. The US Federal Reserve's decision to keep rates unchanged and escalating Middle Eastern tensions have also added pressure. Patel claimed that bitcoin's next support level is at $53,200, with resistance at $55,800.
Despite current market volatility, there are positive signs on the horizon. Morgan Stanley's plan to offer Bitcoin ETFs to its wealthy clients indicates growing institutional interest in digital assets, potentially stabilising and boosting the market in the long term.