05/08/2024   Bitcoin (BTC) Price Dips Below $50K as Investors Flee Risk Assets; Ether (ETH) Slumps

 

Ether slumped by the most since May 2021.

(Getty Images)

(Getty Images)

  • Ether posted its steepest single-day plunge since May 2021.

  • The crypto fear and greed index flashed "fear" and fell to its lowest level in a month.

  • The CoinDesk 20 Index dropped nearly 20%.

Bitcoin (BTC) extended its slump during Asian trading hours on Monday, plunging below $50,000 before recovering to around $51,000, still the lowest level since mid-February, as rising tensions in the Middle East and concerns about the strength of the global economy ate into investor confidence.

The world's largest cryptocurrency fell for a fourth straight day, dropping to as low as $49,112, data from TradingView show. Ether (ETH), the native token of the Ethereum blockchain, sank to as little as $2,060, the least since Jan. 3. The CoinDesk 20 index, which tracks some of the most liquid non-stablecoin tokens, dropped nearly 20%.

Ether's near 25% slide is the worst single-day hit for the token since May 2021. The sell-off in ether was catalyzed by rumors of crypto market maker Jump Trading's liquidating assets. On-chain sleuth spotonchain identified a wallet supposedly belonging to Jump Trading that transferred 17,576 ETH, worth over $46 million, to centralized exchanges, a sign of possible liquidation.

The bloodbath led to over $1 billion in liquidations in the crypto futures market, with ether registering over $350 million in liquidated bets, a rare oddity.

The panic selling in bitcoin and the overall crypto market has been triggered by a wider fall in financial markets as fears of a global recession and rising tensions in the Middle East had investors hitting the panic button. Japan's Nikkei 225 Index slumped 12.4%, the Stoxx Europe 600 Index fell more than 3% and micro futures on the S&P 500 Index lost 3.3%.

This has led to the crypto fear and greed sentiment index flashing β€œfear,” and reaching its lowest level since early July. The index tracks volatility, prices, and social media data to indicate whether participants are fearful – usually a sign of local bottoms – or greedy, which marks market tops.

As if in anticipation, investors pulled $237.5 million from U.S. spot bitcoin exchange-traded funds (ETFs) on Friday, the most since May 1, according to data from SoSoValue. Ether ETFs were hit with $54.3 million of net outflows. Across the broader crypto market, digital asset investments ended four weeks of net inflows with outflows of $528 million last week, CoinShares said in its weekly report. Bitcoin assets lost $400 million and ether $146 million. CoinShares attributed the withdrawals to concerns of a U.S. recession and the geopolitical environment.

https://www.coindesk.com/markets/2024/08/05/bitcoin-continues-to-bleed-falls-below-50k/