Worst Crypto Crash Since 2022 Has Begun: Understanding What Is Happening (2024)

The crypto market has been hit hard by a dramatic downturn, with many altcoins plummeting 20-50% in a single day. This unexpected and severe drawdown has been described as the worst since the FTX collapse in 2022.

This selloff isn’t isolated to crypto alone—global markets are also suffering, marking one of the worst trading periods for equities in recent history. The sharp drop in crypto prices is largely due to its nature as a “risk-on” asset, which tends to sell off rapidly in times of market fear.

Bitcoin’s Breakdown and Market Reaction

Analyst Miles Deutscher said that Bitcoin has been leading the market’s decline, breaking below key support levels. The cryptocurrency plunged through the critical $60,000 range, triggering a cascade of liquidations that saw it drop to as low as $50,000. As of the latest updates, Bitcoin has found temporary support around $48,000, a level that previously marked the breakout zone during its last major rally and the dead-cat bounce during the bear market following FTX. The analyst compares the situation to previous market crashes, like FTX.

Crypto has been hit particularly hard, with over $1 billion in liquidations occurring in the last 24 hours alone. This marks one of the largest liquidation cascades since the FTX collapse. Although the liquidations aren’t as severe as those in April due to reduced leverage in the market, the overall impact on market cap has been devastating, wiping out billions of dollars in value.

Impact of Political Shifts and Market Sentiment

The initial weakening in the market followed Trump’s rally, which created a Sovereign Bitcoin narrative. However, the market sold off after this, partly due to Kamala Harris Kamala Harris Kamala Harris is an American politician attorney, and currently serving as vice president of the United States. She is the first female vice president and the highest-ranking female politician in the U.S. Kamala was Born in Oakland, California, and graduated from Howard University with a degree in political science and economics, and later pursued her law degree from the University of California, Hastings College of the Law. As a politician, she implemented stricter laws, the DREAM Act, and federal legalization of cannabis, healthcare, and taxation reform. Harris secured enough non-binding support from delegates to become the speculative nominee of the Democratic Party. Vice President rising odds, which were seen as less favorable for crypto than Trump’s potential presidency.

Miles discusses how the recent aggressive market downturn, leading to a liquidation cascade and forced selling, often sets the stage for opportunities in the crypto market, especially with potential catalysts on the horizon. Despite the aggressive nature of the current downturn, he believes the selling has been more severe than warranted by the de-risking.

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