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First Mover Americas: Bitcoin Crashes to $50K as 'Perfect Storm' Hits Crypto Market

The latest price moves in crypto markets in context for Aug 5, 2024.

By Krisztian Sandor, Omkar Godbole|Edited by Sheldon Reback

Updated Aug 6, 2024, 2:23 p.m. Published Aug 5, 2024, 12:23 p.m.

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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Cryptos crashed as risk-off sentiment permeated global markets. Bitcoin BTC$90,361.01 tumbled below $60,000 during the weekend, then nosedived to $49,300 during Monday's Asian morning as investors fled risk assets. Bitcoin is down nearly 15% in the past 24 hours, recovering to near $52,000. Ether ETH$3,091.32 fell 22% to $2,100, recording its biggest one-day fall since 2021. The altcoin-heavy broad-market benchmark CoinDesk 20 Index (CD20) slid nearly 20%, with crypto majors solana SOL$132.66 and Near Protocol NEAR$1.6336 plummeting 20%-25%. "Feels like we have been hit by a perfect storm," QCP analysts said in a market update. What started the sentiment shift was Friday's U.S. economic and jobs data igniting recession fears, coupled with rising tensions in the Middle East. The Japanese yen spiked against the U.S. dollar, leading to an unwind of trades across asset classes, with Asian equity indexes suffering record routs on Monday: The Taiwanese index, for example, had its worst day in 57 years. QCP also pointed to crypto trading giant Jump selling off assets, exacerbating the decline.

Crypto-related company stocks slid with digital asset prices. Crypto exchange Coinbase (COIN) dropped more than 9% in U.S. pre-market trading, while MicroStrategy (MSTR), which has a policy of buying bitcoin and holds more than 1% of the total supply that will ever be issued, lost 13%. CoinShares, a crypto asset manager, fell 7.5% in Sweden. U.S.-listed miners Marathon Digital (MARA) and Iren (IREN) both lost almost 14%, Hut 8 (HUT) fell 12% and Riot Platforms (RIOT) lost 11%.

Derivatives traders suffered a massive leverage wipeout as prices crashed. Crypto-tracking futures recorded over $1 billion in liquidations in the past 24 hours, CoinGlass data shows. Ether futures recorded over $340 million in liquidated bets and bitcoin futures losses led at $420 million. Futures tracking Solana’s SOL, dogecoin DOGE$0.1370, XRP XRP$2.0126 and pepe PEPE$0.0₅4327 took on $75 million in cumulative liquidations.

Chart of the Day

The chart shows bitcoin's six-month skew, measuring the spread between prices on calls and puts.
The positive value indicates that long-term bias remains bullish amid the price crash to $50,000.
A call offers an asymmetric upside to the buyer and represents a bullish bet on the market.
Source: Amberdata

- Omkar Godbole