Cryptocurrency prices experienced a significant decline on Monday, continuing the downward trend from the previous weekend. The sharp fall was part of a broader sell-off in the global stock market as investors pulled away from risk assets. By late Monday, Bitcoin had rebounded slightly but still remained near its lowest price since February. Ethereum saw a substantial reduction in its yearly gains.
Liquidation Statistics
According to Coinglass, the cryptocurrency market saw over $1.19 billion in liquidations within a 24-hour period. Bitcoin futures led the losses with $421.1 million in liquidated trades, followed by Ethereum at $375 million. Other cryptocurrencies such as Solana, Dogecoin, and Ripple collectively faced $95.8 million in liquidations. During this period, more than 312,700 traders were liquidated, with the largest single liquidation order being a BTC/USD trade valued at $27 million on the Singapore-based Huobi exchange.
Market Sentiment
Gracy Chen, CEO of Seychelles-based exchange Bitget, commented on the current market sentiment, describing it as being in “panic” mode. She highlighted that the global economic situation, marked by rising geopolitical tensions and recession pressures in the U.S., has contributed to the widespread market sell-off. Chen pointed out that the U.S. stock market had declined for three consecutive days, while the Japanese market had experienced a circuit breaker on two consecutive trading days. The VXX, which tracks the Cboe Volatility Index (Wall Street’s fear gauge), surged 27% in a single day, reflecting significant market anxiety.
Chen also noted that institutional actions have exacerbated the market turmoil. For instance, Berkshire Hathaway recently sold off shares in Apple and Bank of America to increase its cash reserves, impacting overall market sentiment. Additionally, Jump Crypto, a market maker, sold Ethereum following its analysts’ predictions of a decline after spot ETF approvals.
Future Market Outlook
Chen indicated that before the market can establish a bullish trend, it needs to undergo a sharp decline to reduce the number of long positions and selling pressure. The key factor affecting the market trend currently is the sentiment index. If the VXX begins to fall, it would signal a decrease in panic sentiment, potentially leading to a stabilization of the market.
Price Movements
Bitcoin’s price fluctuated significantly, rebounding to $53,800 by late Monday after hitting a low of $49,314 earlier in the day. This decline pushed Bitcoin back to its lowest level since February. Despite the drop, Bitcoin has managed to retain a 22% gain for the year, though it has fallen from its record high of $73,798 reached on March 14.
Ethereum traded around $2,240 on Monday afternoon, recovering slightly from its morning low of $2,128. Ethereum’s gains for 2024 have been reduced to only 6%, down from its 52-week high of $4,092 also reached on March 14. The cryptocurrency remains significantly below its November 2021 peak of over $4,800.
Impact on Related Stocks
In the wake of the crypto market downturn, shares of cryptocurrency-related companies also suffered. Coinbase (COIN) saw its losses trimmed to 7.3% by late Monday after an initial drop of nearly 18% following its Q2 report. Bitcoin mining stocks also experienced declines, with Iris Energy (IREN) down 2.8%, CleanSpark (CLSK) falling 9.6%, and Marathon Digital (MARA) down 1.4%. Hut 8 (HUT) and Core Scientific (CORZ) saw reductions of 6.5% and 7.5%, respectively, with early trade losses ranging from 17% to 21%.
The cryptocurrency market remains highly volatile amid broader economic uncertainties, and ongoing developments will be closely watched by investors and market analysts alike.
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