Bitcoin Price Plummets Below $53,000 – Reasons for the Meltdown
The increase in interest rates in Japan and potential rate cuts in the US are factors in bitcoin’s recent decline. Geopolitical tensions and major sell-offs from firms like Jump Crypto add to Bitcoin’s market turmoil. The cryptocurrency market has reverted to a bloodbath, and Bitcoin (BTC) is no exception. The dominant crypto has plunged to [...]
- The increase in interest rates in Japan and potential rate cuts in the US are factors in bitcoin’s recent decline.
- Geopolitical tensions and major sell-offs from firms like Jump Crypto add to Bitcoin’s market turmoil.
The cryptocurrency market has reverted to a bloodbath, and Bitcoin (BTC) is no exception. The dominant crypto has plunged to levels not seen in six months, dropping below $55,000. The cryptocurrency market recently saw its worst three-day sell-off in nearly a year, with losses of up to $510 billion since August 2.
At the time of writing, BTC was trading around $54,453.90, down 10.31% over the last 24 hours and 21.44% in the previous seven days, indicating a significant bearish momentum since the beginning of August.
Several factors are said to have contributed to Bitcoin’s price drop. One key factor is the Bank of Japan’s hike in the benchmark interest rate last week, which was also noted by popular blockchain researcher Collin Brown in his most recent tweet.
#Bitcoin price surged to $54,000—here’s why:
Japan's rate hike
Will #XRP and #BTC rise again? Yes! Retweet if you buy the dip!
pic.twitter.com/JHT3xFD6zx
— Collin Brown (@CollinBrownXRP) August 5, 2024
Bitcoin Faces Pressure Amid Japanese Market Collapse and US Rate Cut Speculations
That action led the Japanese stock index, the Nikkei, to collapse, and it is still hitting new lows as of this writing. Additionally, the possibility of the US Federal Reserve cutting interest rates in September has impacted both traditional and crypto markets.
Traders predict this conclusion with 100 percent certainty, expecting a 71% possibility of a 50-basis-point rate cut and a 29% chance of a 25-basis-point drop.
Also, the yield on 10-year US bonds fell, down to 3.75% on Sunday night from 4.25% just a week ago. Weak US job data added to the already large list of unfavorable concerns.
Furthermore, Jump Crypto’s huge sell-offs have drawn notice, with the corporation unloading assets worth hundreds of millions of dollars off its books in recent days, according to Arkham Intelligence data.
In terms of geopolitics, the disagreement between Israel and Iran has increased the risk of war, according to Jason D. Meister, a former Trump Advisory Board Member. This has resulted in a fall in market risk appetite, which has had a significant impact on assets such as Bitcoin.
As a result of these essential factors, fear spread, prompting investors to withdraw funds from risky assets such as cryptocurrency. However, some analysts see this as an opportunity to acquire more cryptocurrency, claiming that the lower prices are the result of non-technical issues rather than flaws in the underlying projects or networks.
Meanwhile, CNF reported that the Bitcoin Reserve Bill has progressed to the Senate Banking Committee. If passed, this may considerably increase Bitcoin’s value by establishing it as a US reserve asset.
On the other hand, during the Bitcoin Conference 2024, journalist Tucker Carlson provoked outrage by saying that the CIA created Bitcoin. Saifedean Ammous, author of “The Bitcoin Standard,” challenged this hypothesis, claiming that Bitcoin’s software is transparent and has undergone extensive auditing.
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