The cryptocurrency market experienced a tumultuous week, culminating in a significant sell-off early Monday. Major cryptocurrencies, including Bitcoin, Ethereum, and Solana, suffered substantial declines, leading to widespread liquidations amidst a backdrop of global economic instability and a stock market downturn.
Bitcoin’s price fell below $50,000 for the first time since February, hitting a low of $49,351 before partially recovering to around $51,000. This drop increased Bitcoin’s dominance in the market to 58%, as both altcoins and traditional stock markets tumbled, erasing over 17% of the total cryptocurrency market capitalization.
Last month, the total market cap stood at approximately $2.16 trillion. As of now, it has plummeted to around $1.76 trillion.
Also Read: Young Chinese Couples Delay Marriage, Rates Reach 12-Year Low
Experts are cautioning that Bitcoin’s recent decline might signal the onset of a more severe downturn. They point to the ongoing economic turbulence and a potential decoupling of cryptocurrencies from traditional stock markets.
Tristan Dickinson, Chief Marketing Officer at exSat Network, noted in an interview with Investing.com that Bitcoin is not immune to broader economic events. “The capitulation of Japanese markets (Nikkei down by 12%) combined with the poor performance of the Dow Jones, S&P 500, and Nasdaq, reflects a global sentiment of recession fears,” Dickinson said.
He added that while “pullbacks are inevitable,” a sustained hold above $50,000 could potentially signal the beginning of a bull market. However, he advised caution, noting that August and September are historically weak months for Bitcoin, which might result in sideways movement and further testing of support levels.
Ethereum also faced a sharp decline, losing nearly 25% of its value in just two hours, marking its worst single-day drop since May 2021. At the time of writing, ETH was trading around $2,190, recovering slightly from an earlier low of $2,170. Binance Coin and XRP also experienced significant declines of over 10%.
The market turmoil was exacerbated by rumors of a major crypto market maker liquidating assets following substantial Ether transfers to centralized exchanges. The panic selling was fueled by broader declines in financial markets due to recession fears and escalating tensions in the Middle East. Japan’s Nikkei 225 Index dropped 12.4%, the Stoxx Europe 600 Index fell 2.8%, and micro futures on the S&P 500 Index decreased by 2.9%.
Among the top 10 cryptocurrencies by market cap, Solana and Dogecoin were hit hardest. Solana fell nearly 28% over the past week to $133, while Dogecoin dropped about 23% to just under $0.10.
The recent market downturn was further aggravated by a disappointing U.S. jobs report released on Friday, which heightened recession fears and negatively impacted the stock market before the weekend.
