Bitcoin suffered a dramatic plunge of over 12% on Monday, August 5th, plummeting to the $54,000 level. This sharp decline was triggered by a broader market sell-off fueled by mounting concerns about a potential US recession. As investors fled riskier assets, the cryptocurrency market bore the brunt of the turmoil.
Renowned economist Peter Schiff added to the bearish sentiment, predicting a substantial gap down for Bitcoin ETFs on Monday. This forecast, coupled with last week’s $230 million outflow from spot Bitcoin ETFs and the broader crypto market’s $800 million liquidation, painted a grim picture for the digital asset.
The contagion spread beyond Bitcoin, with Ethereum dropping over 30% and other altcoins experiencing significant corrections. Analysts are now raising alarm bells about a potential Bitcoin price dive to $40,000, as the cryptocurrency failed to hold the crucial 200-day moving average support level.
The broader economic landscape is also contributing to the crypto meltdown. Japan’s Nikkei index has tumbled by more than 20% since its July peak, and US futures are pointing to a potential market downturn. These factors, coupled with growing recession fears, have created a perfect storm for risk-off sentiment.
As the crypto market grapples with this severe downturn, investors are bracing for increased volatility and potential further losses. The coming days will be crucial in determining whether Bitcoin can recover from this steep decline or if it will continue its downward trajectory.
Bitcoin’s dramatic 12% plunge on Monday, August 5th, has sent shockwaves through the cryptocurrency market. As global investors grapple with mounting recession fears, safe-haven assets have gained traction while riskier investments like Bitcoin have taken a severe hit.
The cryptocurrency’s correlation with traditional markets has once again been underscored, raising questions about its viability as a hedge against economic downturns. This sharp decline could have far-reaching implications for the broader crypto ecosystem, with potential knock-on effects for other digital assets and the overall industry.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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