Bitcoin News- Bitcoin Dips Under $53K, Causing $600M in Leveraged Longs to Be Liquidated
Bitcoin News- On August 5, Bitcoin’s price dropped sharply to as low as $52,500, marking a sudden plunge of 10% from $58,350 in less than two hours. As of the latest data, Bitcoin has partially recovered and is trading at $54,384, according to TradingView. The last time Bitcoin was below $53,000 was on February 26, following a surge after the approval of spot Bitcoin ETFs in the U.S.
Ether also experienced a dramatic drop, falling 18% from $2,695 to as low as $2,118 within the same period. It has since bounced slightly and is trading at $2,358, according to TradingView.
eToro market analyst Josh Gilbert commented that cryptocurrencies often act as a leading indicator of investor sentiment, suggesting that when investors panic or seek to reduce leverage, crypto assets are typically among the first to be impacted. Gilbert also noted that while the recent sell-off might seem severe, it presents potential opportunities for investors, especially with anticipated Federal Reserve rate cuts that could benefit crypto assets.
The sharp decline has led to over $740 million in leveraged positions being liquidated across the crypto market in the past 24 hours, with $644 million of leveraged long positions being wiped out, according to CoinGlass data.
Interest in Ether has surged over recent months, driven by the anticipation and subsequent approval of spot Ether ETFs in the U.S.
This crypto market turmoil coincides with a significant sell-off in the Japanese stock market, where the Nikkei 225 fell by 7.1% in early trading. On August 2, Japanese bank stocks suffered their worst performance since 2008 following the Bank of Japan’s decision to raise interest rates.
In the last three days, the total crypto market capitalization has shrunk by as much as $500 billion, marking the largest 72-hour wipeout in over a year.
FAQs
What caused Bitcoin to drop below $53,000?
The recent decline in Bitcoin’s price below $53,000 was triggered by a significant market downturn, which also affected other cryptocurrencies. Factors contributing to this drop include broader financial market volatility, adverse macroeconomic conditions, and shifts in investor sentiment.
How much money was lost in leveraged long positions due to Bitcoin’s drop?
The drop in Bitcoin’s price led to losses of over $600 million in leveraged long positions. This figure represents the total value of positions that were liquidated or suffered significant losses due to the price decline.
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