Key Takeaways:
The price of leading cryptocurrencies declined on Monday amid the global stock market sell-off led by investors fleeing risky assets due to the projection of a recession in the US economy. Bitcoin (BTC), the world’s cryptocurrency by market value, saw its price tumble to a six-month low after the US government released its disappointing economic data.
Bitcoin Fell Below $50,000 As Traders Liquidated Over $1 Billion In Futures Positions
BTC dropped to $49,121, its lowest price since February, during early Asian trading hours, before rebounding to $52,586 by noon. Crypto prices swooned as Friday’s sell-off continued through the weekend, with losses worsening by late Sunday.
According to data sourced by Coinglass, futures tracking the price of cryptocurrencies recorded over $1.19 billion in liquidations. Bitcoin futures lead the chart with $421.1 million in liquidated shares, followed by Ethereum (ETH) at $375 million. Futures tracking the price of Solana (SOL), Dogecoin (DOGE), and Ripple (XRP) recorded a combined $95.8 million in liquidations.
Coinglass noted that over 312,000 traders liquidated their crypto positions between Friday and Monday. The largest order was reported as a BTC/USD trade worth $27 million on the Huobi exchange.
Markets In “Panic Mode” As Global Exchanges Traded In The Red Zone For Two Consecutive Days
In a note to investors, Gracy Chen, CEO of cryptocurrency exchange Bitget, wrote that the market is in a “panic” mode as mainstream crypto asset prices have fallen sharply. He wrote that the global economy is alerted by geopolitical tensions and the US economy’s recession pressure.
Wall Street was in the red for three consecutive days and Japan’s Nikkei has been in a “circuit breaker” for two consecutive trading days. Chen also said that Wall Street’s fear gauge and the Cboe Volatility Index soared to 27% in a single day, indicating that the macro-financial market is under greater pressure for a correction, which could widen market selling.
Big financial institutions also played a role in the market-wide sell-off. Warren Buffet’s Berkshire Hathaway sold high-performing stocks like Apple (AAPL) and Bank of America (BAC) over the last 12 trading days to improve its cash reserve. Web3 and blockchain investment firm Jump Crypto sold approximately $91 million worth of Ether (ETH) in the last few days after its analysts predicted that the cryptocurrency would decline following spot Ethereum ETF approvals.
US Economy Only Created 114,000 News Jobs In July, Far Below Expectations
Recession fears intensified after US jobs data released on Friday revealed that job growth in the country in July was significantly weaker than expected. The Labor Department reported an increase of just 114,000 nonfarm payroll jobs, which is well below the forecast of 175,000 and far short of the 200,000 needed to keep up with the country’s growing population.
Worryingly, the US unemployment rate also rose to 4.3%, closing in on a three-year high formed at the height of the COVID-19 pandemic.
While Bitcoin rebounded to the $53,000 range late on Monday, the pullback has caused the apex cryptocurrency to trade at its lowest valuation since February. After hitting an all-time high of $73,798 on March 14, BTC has parred its yearly gains by 22%.
At the time of writing, Bitcoin (BTC) is trading at $57,161 – up 3% over the last 24 hours.
Meanwhile, Ethereum was trading close to $2,240 on Monday noon, rising slightly from the low of $2,218. The world’s second-largest cryptocurrency by market cap is now up only 6% this year as the move to the downside erased most of its gains.
On March 14, ETH managed to hit a 52-week high of $4,092, giving investors hope that it could surpass the ATH above $4,800 from November 2021, only to fall back lower.
At the time of writing, Ether is trading at $2,523 – up 1.09% in the last 24 hours.
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