Bitcoin (BTC) has fallen down to below $50,000 on Aug. 5, with the sudden crash seeing the world’s first cryptocurrency lose about 10% of its value in under two hours.
CoinMarketCap data shows that Bitcoin crashed from just under $61,000 down to $49,500 earlier today. As of press time, Bitcoin regained some of the value lost and trades at about $50,000.
Bitcoin’s price has not ventured under $50,000 since February, when its price took off from about $43,000 and reached over $62,000. The reported 24-hour trading volume also reached over $90 billion as the price plummeted by 17.5% over that length of time.
On the other hand, Ethereum (ETH) saw its price plummet from $2,915 down to under $2,200. CoinMarketCap data also shows that ETH is currently trading at about $2,250 and lost over 22% of its value over the last 24 hours.
Liquidations have run rampant in the crypto space, with CoinGlass data showing over $740 million in leverage positions wiped out in the crypto market over the last 24 hours. Of those liquidations over $644 million was leveraged long positions alone.
Long positions were hit harder for Ethereum traders than Bitcoin. Over $256 million in ETH longs got wiped out, whereas $231 million in BTC long positions were closed by exchanges.
Why has the Bitcoin price crashed?
The liquidations come amid a sharp sell-off event in the Japanese stock market. Nikke 225 is down 12.4% and falling as of press time. Similarly, S&P 500 is down 3.66% today, while Dow Jones 2.8%.
In the United States, Wharton’s Professor Emeritus of Finance Jeremey Siegel calling for the Federal Reserve to issue an emergency 75 basis point cut. Furthemore, he believes that the central banks should also issue another 75 basis point cut indicated for next month at the September meeting — and that’s minimum.”
The fed funds rate right now should be somewhere between 3.5% and 4%.
These remarks follow bond investors noticing a dovish hold on the Federal Reserve’s part and raking in yield curve steepeners. In other words, they started accumulating exposure to short-dated Treasuries and reducing longer-dated exposure.
This drawdown follows Japanese bank stocks seeing their worst day since 2008, amid news that the local central bank will hike interest rates. CoinMarketCap data shows that the total crypto market cap went down from $2.16 trillion to $1.76 trillion in under 24 hours — showing that $400 billion left the market. The one-year chart shows that this is the most extreme 1-day movement of the year by far.
Total Crypto Market Cap One-Year Chart. | Source: CoinMarketCap
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