Bitcoin falls below $50,000: Is a black swan coming to the crypto market?
Bitcoin hits multi-month low as stock markets crash. What happened to crypto market crypto on black Monday?
From Aug. 4 to 5, the crypto market experienced a significant drawdown. Bitcoin fell below $50,000, and Ethereum — $2,200. Following BTC and ETH, other crypto assets from the top 10 by capitalization also were in freefall.
A significant drawdown caused a wave of liquidations in future contracts. Over a day, the figure amounted to more than $1 billion, with a significant prevalence of long positions.
Why is crypto crashing right now?
The collapse of the cryptocurrency market is associated with several factors. Thus, crypto shows a close correlation with stock markets, which have fallen since last week. In turn, they are also influenced by geopolitical tensions in the Middle East.
The latest abrupt changes in the Bank of Japan’s policy and the refusal of the U.S. Federal Reserve to lower the interest rate also add uncertainty.
In addition, community members are discussing the involvement of a significant player in the market dump. On-chain analysts hint at the liquidation of the market maker Jump Crypto. Earlier, Jump Crypto unlocked 120,000 wETH in Lido and sold most of it, giving momentum to the collapse of Ethereum.
Spot On Chain specialists note that over the past 11 days, more than 100,000 ETH have been transferred from wallets allegedly associated with the Jump Trading company to centralized exchanges. The company began moving assets on July 25 — two days after the official launch of the Ethereum ETF in the United States.
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