Key Points:
- Bitcoin hits 2-month low at around $25,400, leading to losses across the crypto market.
- Ether falls below $17,000, while other top 10 non-stablecoins also experience declines.
- Macroeconomic factors and legal battles contribute to investor sentiment, resulting in $1 billion in liquidations.
Bitcoin’s value reached approximately $26,800 in the Asian morning on Thursday, following a drop to around $25,400, its lowest point in two months. Ether also tumbled below $17,000.
After hitting a nadir of $25,400, Bitcoin managed to recover some of its losses during the Asian morning on Thursday, hovering around $26,800. Ether experienced a significant decline, dropping to a low of roughly $1,550 before rebounding just under the $1,700 mark. Concurrently, the top 10 non-stablecoin cryptocurrencies all registered losses due to macroeconomic influences, such as the depreciation of the Chinese yuan and the financial troubles of Chinese real estate behemoth Evergrande. These factors dampened investor sentiment, resulting in a collective liquidation of $1 billion in cryptocurrencies, nearly pushing the total market capitalization to the critical threshold of $1 trillion.
Among the top losers was XRP, which faced a setback after a U.S. judge granted the U.S. Securities and Exchange Commission (SEC) permission to appeal a recent favorable ruling for Ripple Labs concerning the sale of the XRP token. Meanwhile, the Forkast 500 NFT index experienced a decline, although transaction activity continued to rise. U.S. stock futures stabilized after Wall Street closed lower, while the release of minutes from the Federal Reserve’s July meeting sustained concerns of impending monetary tightening.
Over the past 24 hours, Bitcoin slid by 7.02%, reaching $26,819.27 at 07:20 a.m. in Hong Kong. This equated to a weekly loss of 8.88%, as per CoinMarketCap data. Bitcoin’s value had sunk to a two-month low of $25,409.11 early on Friday.
Markus Thielen, head of crypto research at digital asset service provider Matrixport, noted, “During late US / early Asia trading volumes, Bitcoin prices broke the critical support level at $28,000. We knew a crash (or sharp decline) could be coming.” He emphasized that historical patterns of low volatility in Bitcoin were often succeeded by significant price declines.
Macro risks, such as the potential devaluation of the Chinese Yuan, further contributed to the bearish outlook, according to Thielen. The Chinese Yuan’s trading value had reached its weakest point since 2007, and past instances of Yuan devaluation had been correlated with Bitcoin price declines.
Elon Musk’s SpaceX also added to Bitcoin’s negative sentiment by revealing a $373 million markdown in its Bitcoin holdings over the past two years, as reported by The Wall Street Journal.
Ether, alongside Bitcoin, also experienced losses. Ether declined by 5.64% to $1,706.22 and incurred a weekly loss of 7.80%. It reached a five-month low of $1,551.71 early on Friday. Additionally, other top 10 non-stablecoin cryptocurrencies underwent downward movement.
During the preceding 12 hours, the cryptocurrency market saw a collective liquidation of over $1 billion. Of this, $812.67 million in long positions, where investors speculate on price increases, were wiped out. These statistics were provided by data from crypto information platform CoinGlass.
XRP, the token associated with Ripple, saw the largest drop, plunging 12.52% to $0.5136, accumulating a weekly loss of 18.85%. This decline was associated with ongoing legal battles between Ripple Labs and the SEC. The court granted the SEC’s request to appeal an earlier judgment, which ruled that Ripple’s programmatic sales of XRP were not in violation of securities laws, whereas its sales to institutional investors were. This ruling was viewed as a partial victory for Ripple. The SEC initially sued Ripple in December 2020 for allegedly offering unregistered digital asset securities.
The total cryptocurrency market capitalization plummeted by 5.69% within the last 24 hours, reaching $1.07 trillion, which was in close proximity to the significant $1 trillion threshold. During this time frame, trading volume surged by 78.91% to $60.58 billion.
