- On Friday US market witnessed a surprise meltdown
- Tech-heavy US index Nasdaq fell 3.4% last week
- A whale is reportedly dumping massive amounts of crypto
The global crypto market has witnessed immense bleeding in the past 48 hours. Not even Bitcoin, the king, and the second-largest coin based on market cap, Ethereum, were spared. At the time of writing, Bitcoin was trading at $51,089.26, down 16.16%. The market cap was also down 16.33% at $1.01, while the 24-hour volume of trade was in the green: up 201.62% at $82.52 billion.
Ethereum, on the other hand, was trading at $2,264, down 22.24% in just one day. The market cap was $272.03 billion, down 22.18%. Ironically, the trading volume for the past 24 hours stood at $57.34 billion, an increment of 261.15%.
Altcoins were also affected: XRP was trading at $0.4429, down 18.94%; Doge was trading at $0.08131, down 24.51%; and Solana was trading at $111.62, down 22.43%.
Why are Bitcoin (BTC), Ethereum (ETH) and altcoins crashing?
The numbers indicate that something is wrong. Now, the critical question is: Why is the crypto market crashing?
United States market meltdown
The first and foremost reason for the massive crypto crash is the stock market meltdown in the United States.
On Friday, the US stock market witnessed an enormous meltdown that surprised many market watchers and analysts.
The tech-heavy US index Nasdaq fell 3.4% last week, and it has now dropped nearly 10% in the last three weeks. This three-week performance has been the worst since September 2022. The sharply negative turn in the Asian and European markets has resulted in a significant increase in bitcoin market liquidations. Significant declines of 8% were seen in Japan's Nikkei 225, and trade halts in South Korea also indicated trouble.
Massive dump
The cause of the crash is not just the US stock market meltdown. This is according to Arthur Hayes, Co-Founder of futures trading platform BitMEX. In an X post, Hayes revealed that a whale is dumping massive amounts of crypto after losing some assets.
“My TradFi birdies are telling me somebody big got smoked, and is dumping all #crypto. No idea if this is true, I won't name names, but let the fam know if you are hearing the same,” he posted.
For Justin d'Anethan, head of APAC business development of Keyrock, this crash is a little unlike the last. “Unlike previous times, this market feels ETH-led, instead of BTC-led. This of course comes as ETH ETF trade and large investors unwind their ETHE (Grayscale ETH Fund) positions,” he said via The Block.
Fear of recession
Another factor is the fear of looming recession in the US. The fear has kept its grip on US stock market since the meltdown last week.
According to Reuters, the Dow Jones Industrial Average fell 681.07 points, or 1.71%, at the open to 39,056.19 on Monday. The S&P 500 opened lower by 195.42 points, or 3.66%, while the Nasdaq Composite dropped 1,063.63 points, or 6.34%, to 15,712.53 at the opening bell.
This fear has led to significant sell-offs in the cryptocurrency market as investors have become more risk-averse and avoided volatile assets like cryptocurrencies.
Other factors
The decline, particularly in Bitcoin, can be attributed to other factors apart from the two mentioned above, according to Min Jung, an analyst of Presto Research.
“First, the payroll numbers released last Friday were significantly lower than expected, with only 114,000 jobs added. This has heightened recession fears, leading to a 2.43% drop in the Nasdaq and a 1.84% drop in the S&P 500,” Jung said. “Jump Trading has been transferring ETH to a centralized exchange amid rumours that they may be forced to exit the crypto business due to a CFTC investigation.”
Trump raises $25 million in campaign funds at Bitcoin 2024 conference
Meanwhile, TheRadar earlier reported that former United States President and Republican Party nominee for the forthcoming November presidential election, Donald Trump, has raised $25 million to boost his campaign activities. The funds was raised during the Bitcoin 2024 conference in Nashville. This is according to Bitcoin Magazine CEO David Bailey.
The funds was raised after his much-expected speech on Saturday at the venue of the conference, Music City Center. The raiser had about 100 people in attendance and was organised in part by Senator Bill Hagerty.
