- Over $300 billion has been wiped out overnight in the crypto market, with Bitcoin falling below $50,000
- The entire crypto market cap has fallen to $1.7 trillion, down from $2.444 trillion a week ago
- Broader market sentiments have echoed doom, with the Nikkei seeing its worst single-day loss since 1987 after weak US jobs data
Over $300 billion was wiped out overnight in a brutal day in the crypto market, with Bitcoin falling below $50,000. The move took the entire crypto market cap to $1.7 trillion, down from $2.444 trillion just a week ago, with double-digit losses across the board. The move echoes broader sentiments of doom in the global markets, with the Nikkei seeing its worst single-day loss since 1987 after weak US jobs data on Friday fanned fears of a recession in the world’s top economy and boosted the odds of Federal Reserve interest rate cuts.
Six Months Worth of Gains Lost
Bitcoin has been in a steady decline since hitting $70,000 this time last week. Those heady days feel long gone now, with a week-long collapse undoing six months worth of gains:
The drop has now left Bitcoin perilously close to crucial support:
The latest drop is said to have triggered some $850 million in liquidations, with leverage traders as usual bearing the brunt of such heavy downside moves.
Recession Fears Stoked Again
As is typical in such scenarios, several reasons have been put forward for the drop. Things were already looking shaky last week when heavyweight tech firms including Amazon and Microsoft endured large share price drops over worries an AI-fuelled rally this year may have been overdone.
This was compounded by news that the US economy added just 114,000 jobs last month, well down from June and far fewer than expected, while the jobless rate rose to the highest level since October 2021.
All major US stock market indices were down on Friday, with more losses expected today, especially with the Nikkei’s performance early doors. In the crypto world, Jump Crypto, the crypto division of Jump Trading, has shifted hundreds of millions of dollars worth of coins to exchanges in recent days, sparking speculation that it may be preparing to sell off a huge chunk of its assets.
Sentiment is very different to where it was just a week ago when Bitcoiners were cheering its bounce from $53,000 to $70,000, joy which, for the time being at least, seems misplaced.
