Bitcoin Dips Below $50K, Leading to 17% Crash in Crypto Market

Bitcoin Dips Under $50K: Cryptocurrency Market Tumbles 17%

Bitcoin Dips– The price of Bitcoin has dropped below $50,000 for the first time since February, hitting a low of $49,351 before rebounding to around $51,000.

This significant dip comes as Bitcoin’s market dominance rises to 58% amidst a severe downturn in both the altcoin and stock markets. As a result, more than 17% of the total cryptocurrency market capitalization has been erased.

According to CoinMarketCap, the total market cap of the crypto market was approximately $2.16 trillion but plummeted to about $1.76 trillion on August 5.

In the early hours of August 5, Bitcoin’s price drop triggered the liquidation of over $600 million in leveraged long positions held by traders. The market crash also led to a significant decline in Ether, which dropped nearly 20% in just two hours.

As of the latest update, Ether’s price is around $2,200, having recovered from a low of $2,172 reached at 7:25 am UTC on August 5.

Largest Three-Day Crypto Sell-Off in a Year

Since August 2, the cryptocurrency market has experienced its most significant three-day sell-off in nearly a year, with losses exceeding $500 billion. This downturn coincided with a 4% drop in the S&P 500 during the same period.

The market’s decline is fueled by renewed recession fears, disappointing employment data from the United States, and sluggish growth among major tech stocks. This backdrop suggests that the market collapse might just be beginning.

In stark contrast to the week of July 29, when the Crypto Fear & Greed Index was at 67, indicating Greed, the current index has plummeted to 26, signaling a state of Fear.

Bitcoin Layer-2 Sustainability Concerns

On August 2, Galaxy Research released a report questioning the long-term sustainability of many Bitcoin layer-2 scaling solutions. Despite the popularity of these networks, Galaxy analyst Gabe Parker warned that the costs, especially for rollups, might present future challenges.

Parker explained that for Bitcoin rollups to thrive and be sustainable, they need to generate sufficient revenue from transaction fees. This revenue must come from users willing to pay for layer-2 network fees, which will be crucial for their survival and success in the future.

For the latest in crypto updates, keep tabs on Crypto Data Space.