Late Friday, the cryptocurrency market began a significant decline, with BTC almost touching $60,000 and ETH dropping below $3,000. What is behind this decline?
Cryptocurrency market sees red
This week, Bitcoin (BTC) was about to break through the $70,000 mark againDespite the positive turn that prices were taking, short-term volatility decided otherwise.
This is how, at the time of writing, this same BTC is trading at $61,400 after almost touching $60,000 overnight. For its part, ETH now sees its price below $3,000, thus starting a 5th consecutive day of decline:
Figure 1 — ETH price on daily chart
On the liquidation side, we were able to observe $300 million of forced closing of positions. Of this amount, the “long” positions paid the highest price, with $260 million in liquidated volumes.
Now, BTC is once again sailing on its $60,000 support zone, which has rarely been broken to the downside in the last 5 months:
Figure 2 — BTC price on daily chart
💡 How to analyze prices using TradingView?
Nevertheless, The reasons for this decline do not seem to lie at the heart of the ecosystemno sufficiently negative internal news could on its own explain the fall in prices.
TradingView: The essential tool for traders – Receive $15 bonus
Fear of the risk of recession?
So, to find the beginnings of an explanation, we should rather look to the global economy, with markets that fear the risk of a recession. Moreover, Friday would have been the worst day since the Covid crisis of 2020with a loss of $2.9 trillion:
🩸 Stock market records $2.9 trillion loss amid fears of global recession.
The worst day since the Covid crash of 2020 📉 pic.twitter.com/6TH4OrsE1s
— Cryptoast (@CryptoastMedia) August 2, 2024
We were talking about Intel's layoffs and its share price decline, but other titles suffered a significant dropStill in the United States, Amazon, for example, lost nearly 8.8%, Goldman Sachs lost 5.9% and American Express, 6.6%.
For its part, Europe is not spared either, with some stocks suffering more than others, such as Société Générale which lost 5.9%, 5.65% for Crédit Agricole and 4.77% for Schneider Electric. We can also highlight the case of the automobile giant Stellantis and its 7 consecutive days of decline, in the wake of profits down 48%.
Faced with such an economic climate, institutional investors generally prefer reduce their exposure to positions deemed risky. Cryptocurrencies falling into this category are therefore seen as collateral victims.
👉 Also in the news — Ethereum spot ETFs start August in the green, but with declining volume
Now it will be a question of observing to what extent the correlation continues, and the impact that this could have on the ecosystem.
Cryptoast Research: Don't Spoil This Bull Run, Surround Yourself With Experts
The #1 Crypto Newsletter 🍞
Receive a daily crypto news recap by email 👌
What you need to know about affiliate links. This page may feature investment-related assets, products, or services. Some links in this article may be affiliate links. This means that if you purchase a product or sign up for a site from this article, our partner pays us a commission. This allows us to continue to provide you with original and useful content. There is no impact on you and you can even get a bonus for using our links.
Investing in cryptocurrencies is risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers must do their own research before taking any action and only invest within the limits of their financial capacities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with a high return potential implies a high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of these savings. Do not invest if you are not prepared to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Since 2021, I have devoted my free time to seriously training myself on cryptocurrencies in order to acquire as much knowledge and credibility as possible. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyses on Web3 themes to offer exclusive content to Cryptoast readers.
Vincent Maire
1280 articles
