Bitcoin price slips below $50K for the first time since February this year amid the crash in both the crypto and stock markets, losing $200 million of its market cap.
Early Monday trading hours saw Bitcoin (BTC) price fall to a low of $49,351 before bouncing back toward the $52,500 mark. The cryptocurrency has declined almost 20% since reaching a new all-time high of $71,415 in March.
Due to the rapid price decrease, the BTC market cap has fallen below $1T for the first time in months. It has since slightly rebounded to $1,04T. Considering Bitcoin’s dominance in the crypto market, over 17% of the total market capitalisation has been wiped away as well. Moreover, the BTC price decline resulted in $600 million in traders’ leverage-long positions perishing.
The second-largest crypto, Ethereum (ETH), has been affected too. The cryptocurrency lost almost 20% of its value within a few hours after the BTC dip. At the point of writing, the token has recovered a little and is worth about $2,350 compared to the $2,900 registered yesterday.
The reasons for the crypto market crash are numerous. Starting from the rising geopolitical tensions in the Middle East and economic indicators showing some signs of a looming recession to the unwinding of positions in the Japanese yen, there are a lot of unfavourable factors for risky assets like Bitcoin and altcoins.
Global stock markets are also down today, with U.S. stock futures (Dow Jones, S&P, and Nasdaq) falling 1.4%, 2.2% and 3.5%, respectively. Last Friday marked the third straight week of losses for Nasdaq. Thus, the tech-heavy index lost over 10% from a record set last month. Japan’s Nikkei 225 index dropped more than 12%, sending ripples across the Asian markets.
As US unemployment data demonstrated growth according to the Friday report of the Bureau of Labor Statistics, concerns have increased that the country’s economic system is slowing down too quickly, heading for a recession. It is one of the main reasons for today’s market volatility.
