From the US presidential race between Donald Trump and Kamala Harris to the Japanese stock market crash, several macroeconomic factors have impacted the prices of crypto assets. Bitcoin saw a 10.98 percent drop in price on international exchanges on Monday, August 5, taking its trading value to $54,073 (roughly Rs. 45 lakh). Meanwhile, on Indian exchanges, Bitcoin recorded a similar percentage loss – taking its price to $61,560 (roughly Rs. 51 lakh).
“Investors, fearing a prolonged bearish trend, are reacting with increased volatility and panic. The price drop has led to the liquidation of around $600 million (approximately Rs. 5028 core) in leveraged long positions. This highlights the inherent risks of leveraged trading in the crypto space as sudden price movements can lead to significant losses for investors who find themselves in unfavorable positions,” CoinSwitch Markets Desk told Gadgets360, commenting on the market status.
Ether’s loss on Monday was higher compared to Bitcoin. At the time of writing, the price of ETH was trading at $2,307 (roughly Rs. 1.9 lakh) after the asset suffered a loss of over 20 percent in the past 24 hours. This price for Ether is almost the same on national and international exchanges.
“While the sudden drop is alarming, history suggests that a rapid market recovery is possible. The Bank of Japan’s rate hike triggered this broad correction, which affected both crypto and traditional markets,” Avinash Shekhar, co-founder and CEO of Pi42, told Gadgets360.
Tether, Binance Coin, Solana, Ripple, Dogecoin and Cardano suffered losses on Monday, as did BTC and ETH.
Tron, Avalanche, Shiba Inu, Polkadot, Chainlink, Leo and Litecoin also joined the list of loss-making cryptocurrencies on Monday.
The total market capitalization of the crypto sector fell by a remarkable 12.27 percent in the past 24 hours, taking the crypto market valuation down to $1.89 trillion (approximately Rs. 158,39,844 crore), according to data from MintMarketCap.
“The crypto market has fallen by 15-20 percent over the past four days, driven by heavy selling in global equities and significant declines in indices. Geopolitical tensions between Israel and Iran, as well as the movement of BTC worth $1 billion (approximately Rs. 8,380 crore) by Genesis for in-kind repayments to creditors, also contributed to the decline,” CoinDCX told Gadgets360.
Based on historical trends in the crypto market, the market needs to experience a sharp decline before it develops a real bullish drive. Then, the long positions of the contract are reduced to reduce the selling pressure for future increases.
“This is an important factor in the rapid rise of the market, observers can continue to pay attention to changes in the macro market, including the panic index indicators. At present, the sentiment index is the most important key to influence the market trend. If VXX starts to decline, it means that the panic sentiment has subsided,” Gracy Chen, CEO at Bitget, told Gadgets360, commenting on the market situation.
Cryptocurrencies that saw small gains on Monday included Augur and Dogefi.
Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information contained in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
