Cryptocurrencies suffered a sharp decline on Monday, with Bitcoin plunging below the crucial $50,000 level for the first time since February. The broader cryptocurrency market followed suit, as investors grappled with recession fears and a broader market sell-off.
Bitcoin’s price plummeted by nearly 8%, briefly touching $49,111.10 before recovering slightly to around $53,996.70. The steep drop erased the cryptocurrency’s gains from the previous week and sparked concerns about a potential market correction.
Ethereum, the second-largest cryptocurrency, also experienced significant losses, falling by over 11%. Crypto-related stocks, including Coinbase and MicroStrategy, followed the downward trend.The sell-off was triggered by a combination of factors. A weaker-than-expected US jobs report fueled recession fears, leading to a broader market downturn. The Nasdaq Composite entered correction territory, while Japan’s stock market suffered its worst one-day decline since 1987.
Crypto investors were also grappling with uncertainty surrounding the upcoming US presidential election and the ongoing distribution of funds from the collapsed Mt. Gox exchange.
Despite the sharp decline, some analysts remain optimistic about Bitcoin’s long-term prospects. Nexo co-founder Antoni Trenchev noted that such sharp drops are common during bull markets and emphasized the importance of Bitcoin reclaiming its 200-day moving average as a bullish signal.
However, the recent volatility has raised questions about Bitcoin’s reputation as a hedge against economic uncertainty. With the cryptocurrency’s price now below its crucial support level of $55,000, investors are closely monitoring the market for signs of a potential recovery.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoasset