Cryptocurrencies hit by huge selloff. Here’s why (2024)

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Cryptocurrencies hit by huge selloff. Here’s why

ETtechLast Updated: Aug 05, 2024, 04:03:00 PM IST

Synopsis

Bitcoin dropped 13% from its Sunday closing price to $51,560, heading for its biggest one-day fall since November 2022 and its lowest level since February. Ether fell 17% to $2,277, its lowest since mid-January. Ethereum price on Monday was $2,332, down 19.71% from the previous day.

Cryptocurrencies hit by huge selloff. Here’s why (2)

The cryptocurrency market saw its biggest three-day sell-off in recent years due to growing fears of a possible US recession and rising geopolitical concerns.

Bitcoin dropped 13% from its Sunday closing price to $51,560, heading for its biggest one-day fall since November 2022 and its lowest level since February. Ether fell 17% to $2,277, its lowest since mid-January. Ethereum price on Monday was $2,332, down 19.71% from the previous day.

Why is this happening?

The drop in crypto prices came at the same time as a broader decline in stock markets across the Asia-Pacific. Japan’s Nikkei 225 fell by up to 7% on Monday, continuing losses from last week, after the Bank of Japan decided to raise its policy rate to 0.25%, its highest level in 16 years.

In the US, the Nasdaq fell 10% from a record high on August 2, following concerns about pricey Big Tech valuations and a cooling economy. Tesla and Alphabet were among the companies that contributed to these declines.

Also read:Market Crash: Are we moving towards recession? Some key numbers from the US, where a sneeze can make the world catch a cold

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Several major companies, including Microsoft and Intel, reported weaker-than-expected second-quarter results. Nvidia also faced difficulties due to expectations of upcoming rate cuts in September.

Despite these issues, the cryptocurrency market has had a boost this year because the US Securities and Exchange Commission approved an exchange-traded fund to track the prices of bitcoin and ether.

Social media reaction:

"Bitcoin has plummeted to around $53,000, marking a significant decline, while Ether has also turned negative for 2024, reflecting broader concerns in the crypto sector. This downturn is driven by regulatory pressures, adverse macroeconomic factors like weak US job data, and the Japanese stock market crash. Investors, fearing a prolonged bearish trend, are reacting with increased volatility and panic," said CoinSwitch Markets Desk.

— CoinSwitch (@CoinSwitch)

Thousands of social media users shared memes on this issue

— lord_bsc6 (@lord_bsc6)

— BitcoinMemeHub (@BitcoinMemeHub)

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Cryptocurrencies hit by huge selloff. Here’s why (2024)

Bitcoin dropped 13% from its Sunday closing price to $51,560, heading for its biggest one-day fall since November 2022 and its lowest level since February. Ether fell 17% to $2,277, its lowest since mid-January. Ethereum price on Monday was $2,332, down 19.71% from the previous day.

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