Summary
- Bitcoin’s current price crash is similar to moves in March 2020.
- On August 5, BTC dropped below $50,000.
Bitcoin’s current price trajectory looks similar to the crash dating back to March 2020, triggered by the covid pandemic.
According to official data, we have a descending broadening wedge, showing the similarities. Market analyst, CryptoBullet reveals the similarities via a post on X:
At the moment of writing this article, Bitcoin is trading below $50,000, down by over 18% in the past 24 hours.
Today’s price drop coincides with a massive sell-off in the crypto and the traditional stock market.
Multiple factors led to this extreme bleeding of the global markets, including liquidations of leveraged positions, and macroeconomic concerns.
Bitcoin’s Price Drop Explained
In the past 24 hours, the crypto market saw liquidations of over $1 billion, with BTC recording liquidations of $416 million, according to data from CoinGlass.
Leveraged positions allow traders to borrow funds to boost exposure to the market, amplifying potential gains, and losses as well.
When Bitcoin’s price started to drop, these positions were automatically liquidated, exacerbating the selling pressure.
Ethereum also saw important liquidations totaling almost $370 million in the past 24 hours.
Bitcoin’s total market cap dropped by 18% today, and it currently stands at $988 billion.
Major stock indices including the S&P 500 and Nasdaq also recorded declines today of 1.84% and 2.43% respectively.
US fears of recession that were triggered by poor employment data in the country also contributed to the negative sentiment in the financial markets. This correlation between the performance of traditional markets and crypto underscores the connection between the two.
As we reported earlier today, the macroeconomic issues and geopolitical concerns have all contributed to the price decline of Bitcoin and the broader crypto market.
Election uncertainty triggered crypt market sentiment uncertainty, and extreme volatility, as Vice President Kamala Harris’ approval ratings rose.
Also, on-chain liquidations across DeFi protocols have reached numbers over $350 million in the past 24 hours. Centralized exchanges also recorded futures liquidations above $1 billion.