The bitcoin market crash is behind us. The cryptocurrency has lost 12% of its value since yesterday. Ether as much as 20.
Market crash
Bitcoin has lost 12% of its value since yesterday. It almost fell below $52,300. Currently, 1 BTC is worth just over $53,000. Over a 7-day period, that means a 24% drop.
Ether did even worse. 1 ETH fell to just over $2,000. You can currently buy one Ether for $2,336, which translates to a 19 percent drop since yesterday and a whopping 30 percent drop over the past 7 days.
The mood is awful. The market has felt fear again. The fear and greed index is 26 (fear). However, the last survey was conducted at a price of $58,110. Investors may already feel extreme fear.
The mood is probably worsened by the fact that almost everything is losing value. The day started with huge drops on the Japanese stock market.
It is falling, but why?
But why did such a sharp decline occur? Note that the situation is somewhat reminiscent of the Covid crash of early 2020. It’s not just cryptocurrencies that are losing value – almost everything is getting cheaper.
The sell-off in Japan is something special. At the time of writing, the Nikkei is down almost 13%. Futures on US indices are down almost 3%. Even in India, the Sensex is down 3% (even because it is the darling of investors). This all looks like panic, and panic is not selling…
– wrote economist Piotr Kuczyński in his post on X.
And indeed, it all looks like panic caused by rumors of a potential escalation of the conflict in the Middle East. Israel has been accused by Iran and Hezbollah of killing two leaders of the latter organization. Tehran is now threatening Tel Aviv with a military response (it is not known what exactly this means – most likely a drone strike). However, markets interpret this as a potential trigger for a larger war.
Nothing has changed in terms of crypto fundamentals. ETFs are still operating, and the Fed will likely start cutting interest rates in September.
