In a significant development that has sent shockwaves through the global financial landscape, Bitcoin, the pioneering cryptocurrency, has taken a sharp descent, dipping below the crucial threshold of $29,000. This startling event marks the first time in quite some time that Bitcoin has witnessed such a dramatic decline, casting a spotlight on the inherent volatility and intricate dynamics of the cryptocurrency market. As Bitcoin dips below $29K, this fall is estimated to have a significant causal relationship with the entire crypto market experiencing a huge fall past few days.
Liquidation of $160 million in the crypto market
Bitcoin has been trading above the $29K mark for an extended period until in the last 2 days when it dropped by 2% dipping it below $29K and making it $28,428. This abrupt movement of price has come off as a shock considering it has been observed to be relatively steady throughout July. This has made over 54,000 traders liquidate their funds causing a considerable liquidation of over $150 million in the last 36 hours.
As Bitcoin dips below $29K for the first time since June 2022, the entire crypto market is being affected. Blockchain analytics company Kaiko announced on August 16th that the 90-day volatility of BTC and ETH reached their lowest levels in multiple years, measuring 35% and 37% respectively. This decrease in volatility has placed them below the volatility of oil, which stands at 41%.
Substantial losses borne
With about $160 million being liquidated in the crypto industry, the losses borne by traders are worth millions. The majority of losses were incurred by traders who had long positions, resulting in approximately $140 million in losses. Notably, Bitcoin and Ethereum (ETH) were major contributors to these losses, accounting for a combined total of $62.67 million. Conversely, short traders experienced losses that amounted to less than $20 million.
When various cryptocurrency exchanges are being considered, OKX and Binance were responsible for over 60% of the total liquidations. Within the reporting timeframe, traders using these platforms suffered losses exceeding $100 million. Other exchanges such as Huobi, Deribit, and Bitmex also witnessed substantial liquidations.
Apart from the above-mentioned losses, reports suggest that all of the top 50 cryptocurrencies, including Ethereum and BNB, experienced declines in value during the specified time frame, coinciding with a 1.83% drop in the overall market.
Ether and Altcoins join the dip
Not only Bitcoin but also Ether and Altcoins dip significantly as the whole crypto industry takes a hit. Both Altcoins and Ether faced losses, with ETH at $1,820 and a 0.8% drop in the last few days. The wider crypto market declined by 1.7%. Tom Lee of Fundstrat Global Advisors remained positive on CNBC, predicting that a Bitcoin ETF approval could lead to a five-fold price increase to over $150,000, possibly reaching $180,000 due to high demand and limited daily supply.
The cryptocurrency market experienced a 1.7% decline overall, with major altcoins like SOL, DOGE, and MATIC facing even larger losses of 5-7% in the last 36 hours. XRP, the fifth largest crypto, dropped below 60 cents due to a 4.7% loss in 24 hours and a 19% drop in the last month since its mid-July rally sparked by a court ruling. Market sentiment, regulations, and technical factors are intricately impacting digital asset prices.
As Bitcoin dips below $29K, It marks a notable decline in its value. This decline reflects the ongoing volatility and uncertainty within the cryptocurrency market. Influences such as market sentiment, changes in regulations, and overall economic patterns still play a significant role in shaping the direction of Bitcoin’s price movement. As investors and analysts closely monitor these dynamics, the future direction of Bitcoin and the broader crypto market remains uncertain.
Also Read: Politicians claim that Argentina is set to become a Bitcoin haven.
