Crypto Crash News – Bitcoin Plummets to $52,500 in Sudden Market Drawdown

Crypto Crash News – $500 Billion Wiped from Crypto Market Cap in 72-Hour Crash

Crypto Crash News – The price of Bitcoin crashed as low as $52,500 on August 5, in a sudden drawdown that saw the leading cryptocurrency plunge 10% from $58,350 in less than two hours. According to TradingView data, Bitcoin (BTC) has since regained some ground and is trading at $54,384 at the time of publication. The last time BTC traded below $53,000 was on February 26, with the price rallying following the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States.

Ether’s Significant Drop

The price of Ether (ETH) also plummeted 18% from $2,695 to as low as $2,118 within the same time frame. ETH has since bounced slightly, trading at $2,358 at the time of publication, according to TradingView data. Speaking to Cointelegraph, eToro market analyst Josh Gilbert noted that crypto often acts as a “leading indicator of sentiment,” adding that when investors panic or look to deleverage, crypto is typically the first asset to be sold off.

Market Sentiment and Federal Reserve Rate Cuts

“However, in these scenarios, it’s important to zoom out. Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert added. Despite the brutal drawdown, Gilbert shared an optimistic outlook for crypto in the coming months: “When you invest in crypto assets, you’re stepping into the ring of volatility. This is a small jab for crypto, not even a black eye. We’ve got more rounds left of this bull market before the bell rings.”

Impact on Leveraged Positions

The sharp downward move has resulted in over $740 million in leverage positions being wiped out across the crypto market in the last 24 hours, with just over $644 million in leveraged longs being liquidated, according to CoinGlass data. Notably, traders looking to gain leveraged exposure to Ether were the hardest hit, with over $256 million in ETH longs being liquidated, while $231 million in BTC longs were forcibly closed. There has been a significant increase in the open interest in ETH over the last few months, with traders flocking to gain exposure to the asset in the lead-up to and aftermath of the approval of spot Ether ETFs in the US.

Broader Market Impact

The sharp downturn in crypto asset prices came amid a sharp sell-off in the Japanese stock market, with the Nikkei 225 down 7.1% in early trading hours. On August 2, Japanese bank stocks experienced their worst performance since 2008, driven by a decision from the country’s central bank to hike interest rates.

Massive Market Cap Wipeout

The sudden crash saw as much as $500 billion wiped from the total crypto market capitalization in the last three days — the largest 72-hour wipeout in well over a year. Several market commentators have attributed the recent turmoil to weak jobs data in the United States, slowed growth among market-leading tech companies in the stock market, and concerns about mass selling from crypto trading firm Jump Crypto.

FAQ: Bitcoin and Ether Price Drop

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