top of page
Search

Crypto Market Collapse: Bitcoin and Altcoins Tumble in July 2024

The cryptocurrency market continues to experience a significant downturn as Bitcoin's price fell to $53,400 amid a wave of panic selling that has also affected various altcoins.

HIGHLIGHTS

  • Bitcoin price dropped to a 24-hour low of $53,400, reflecting deteriorating market sentiment.

  • The crypto market entered a bear phase, having declined by 20%.

  • Key reasons for the selloff include the Mt. Gox repayment, BTC sales by governments, a hawkish outlook from the Federal Reserve, and options expiry.

Market Impact The overall market capitalization of cryptocurrencies has plummeted by more than 11% over the past 48 hours, causing a loss of $250 billion for investors. The market cap fell by over 8% in the last 24 hours, pushing the industry back into a bear market. Bitcoin hit a 24-hour low of $53,485, breaching a critical support level and risking a further drop to $52,000.

Altcoins such as Ethereum, BNB, Cardano, XRP, and Toncoin saw declines exceeding 15%, with tokens from the Solana ecosystem, meme coins, and some AI coins experiencing even greater losses over the past 48 hours.

Reasons for the Decline Mt. Gox Repayment Investor panic ahead of Mt. Gox’s $10 billion repayment in BTC and BCH has been a major driver of the selloff. JPMorgan and CoinShares have warned about market disruptions due to potential selloffs by creditors.

Government Sales The U.S. and German governments have moved significant amounts of BTC recently. The U.S. government transferred 237 BTC related to Potapenko/Turogin seized funds, while the German government dumped 1,300 BTC on platforms like Bitstamp, Coinbase, and Kraken, along with moving 1,700 BTC worth $98.76 million to an unknown wallet. These actions have exacerbated the panic among investors.

Liquidation and Options Expiry Coinglass reports that $680 million in cryptocurrencies were liquidated over the past 24 hours, impacting more than 232,000 traders. The largest single liquidation order on Binance involved ETHUSDT valued at $18.48 million. Approximately $590 million in long positions and $90 million in short positions were liquidated in the same period.

Total Liquidations Chart
Source: Coingape

Over 17,500 BTC options with a notional value of $1.02 billion are set to expire, with a put-call ratio of 0.67, indicating ongoing selloff pressure. The put/call ratio climbed above 1.09 in the last 24 hours, signaling bearish sentiment among options traders.


BTC July 05, 2024 Open Interest by Strike Price
Source: coingape

Macro Impacts Federal Reserve Chair Jerome Powell’s recent speech and the release of FOMC Minutes confirmed a hawkish stance on rate cuts, adding to market pressures. The CME FedWatch indicates a 66.5% probability of a 25 bps rate cut in September, up from 59% last week, driven by weak U.S. economic data.

The U.S. dollar index (DXY) remained around 105, and the 10-year Treasury yield dropped to 4.35% following data indicating a slowing labor market.

USDT 60-Day Market CAP
Source: coingape

Analyst Bitcoin Predictions

Analysts are divided on the market's next move. Some predict a rebound, suggesting that shorting Bitcoin and altcoins might be a poor strategy, while others foresee a further decline.

Optimistic View: Options market data indicates that traders expect Bitcoin to recover to around $60,000 by the end of the month. Long-term options show strong interest in prices between $100,000 and $120,000, suggesting a potential rally by year-end.

Pessimistic View: Other analysts predict Bitcoin could drop to $51,500, with significant support in the lower $50,000 range. Searching for the best crypto exchange in India? In just 10 minutes, you can check the latest USDT to INR exchange rate, select your preferred payment method, and sell a substantial amount of USDT at the best rates available. Begin your crypto journey with ease and confidence at A2ZCrypto

Conclusion

The crypto market is currently experiencing heightened volatility, influenced by a combination of macroeconomic factors, government actions, and investor sentiment. While the short-term outlook remains uncertain, some analysts remain optimistic about a potential recovery in the medium term. Investors are advised to stay informed and consider the broader market dynamics before making decisions.

DISCLAIMER

The views and opinions expressed are for informational purposes only and do not constitute financial, investment, or other advice.

0 comments

Comments


A2ZCrypto_Telegram_Suppot
bottom of page