Crypto Market Crash: Why Bitcoin And Altcoins Are Falling

The combined crypto market capitalization has dropped by more than 11% in 48 hours, causing investors to lose 250 billion. The market cap tumbled by over 8% in the last 24 hours to return the industry to a bear run. Bitcoin price hit a 24-hour low of $53,485, falling below the key support level and risking a collapse to $52,000.

Altcoins including Ethereum, BNB, Cardano, XRP, and Toncoin dropped more than 15%. Whereas, Solana ecosystem tokens and meme coins, as well as some AI coins extended the double-digit drop further in the last 48 hours.

Crypto market sentiment falls back to fear amid panic selling by investors ahead of Mt. Gox’s $10 billion in BTC and BCH repayment starting this week. JPMorgan and CoinShares have warned about market shake-up on concerns of potential selloff by creditors.

Crypto Market Officially In Bear Market

As per Coinglass, $680 million worth of cryptocurrencies were liquidated in the last 24 hours. Over 232k traders were liquidated, with the largest single liquidation order on Binance crypto exchange as ETHUSDT valued at $18.48 million.

Nearly $590 million in long positions and $90 million in short positions were liquidated in the last 24 hours. Investors have lost over 150 billion in the last 24 hours as the crypto market cap dropped from $2.24 trillion to $1.99 trillion.

Meanwhile, over 17,500 BTC options of notional value $1.02 billion are set to expire, with a put-call ratio of 0.67. The max pain point is 61,500, implying that Bitcoin price will remain under selloff pressure as BTC fell below $54k today.

Notably, the put/call ratio in the last 24 hours climbed over 1.09, with put volume above 17,200 and call volume near 15,793. This indicates options traders have turned highly bearish on Bitcoin.

Implied volatility (IV) in all terms shows significant declines, which means a market recovery in uncertain price movements will see BTC price tumble below $52,000.

Also Read: XRP Lawsuit – Lawyers Claim Ripple Case Is In SEC Favor, Chevron Ruling Irrelevant

Governments Selling Bitcoin

The US and German governments have moved BTC worth millions in the last few hours, as per Arkham. US government wallet address transferred 237 BTC related to Potapenko/Turogin seized funds to the address starting with bc1qvc.

In addition, the German government also dumped 1,300 BTC Bitstamp, Coinbase, and Kraken. They also moved a massive 1,700 bitcoins worth $98.76 million to an unknown wallet.

The transfers by these wallet addresses sparked panic among investors and traders causing BTC price to again fell below the $54,000 level.

Macro Impacts Continue To Build Up

Fed Chair Jerome Powell’s latest speech and FOMC Minutes release confirmed the hawkish stance of Fed officials on rate cuts this year. Election saga with Trump leading after the latest debate has heightened pressure and Fed officials awaits further data on US inflation and the labor market.

CME FedWatch indicates two rate cuts this year. The probability of a 25 bps rate in September has jumped to 66.5% from 59% last week. The weak US economic data bolstered bets for Fed interest rate cuts this year.

US dollar index (DXY) held around 105 on Friday after hitting a three-week low in the previous session. Also, the US 10-year Treasury yield dropped to 4.35% after the latest ISM and jobs data showed a slowing labor market.

Analysts predict a market rebound could come anytime and shorting Bitcoin and altcoins could prove to be the worst decision. Thus, they believe a consolidation near the current level and a rebound above $58k by the end of the week.

“A drop in USDT liquidity will not stimulate BTC growth, conversely, growth will demonstrate demand for purchasing coins,” according to an on-chain analyst.

Also Read: Donald Trump Presidency Can Trigger ‘Global Hash War’ With BTC Reserves, Says Bitcoin Maxi