
Bitcoin Dips Below $50,000 as Crypto Market Decline Worsens
The cryptocurrency market experienced a challenging week, culminating in a significant decline early Monday. Major cryptocurrencies saw further drops, resulting in numerous liquidations across the board.
Bitcoin’s price fell below $50,000 for the first time since February, reaching a low of $49,351 before recovering to around $51,000. Consequently, Bitcoin’s dominance increased to 58% as both the altcoin and stock markets suffered, wiping out over 17% of the total cryptocurrency market capitalization.
The total market capitalization, which was approximately $2.16 trillion last month, has now fallen to about $1.76 trillion.
Tom Cohen, Head Trader at Algoz Technologies, noted that the recent downward trend in cryptocurrency prices had been anticipated by their algorithms, shifting from a bullish stance on Bitcoin and Ethereum to a bearish outlook. He explained that despite Fed Chairman Jerome Powell signaling upcoming rate cuts—typically a positive development for markets—the weak economic data led to interpretations of a potential recession in the U.S., causing significant losses in traditional markets.
Some cryptocurrency analysts suggest that Bitcoin’s recent price drop may signal the onset of an even steeper decline, citing concerns over a looming economic downturn and a disconnect between cryptocurrency performance and broader stock market trends.
Tristan Dickinson, CMO of exSat Network, highlighted that Bitcoin is not insulated from global macroeconomic events. He pointed out that Japan’s stock market had dropped by 12%, which, combined with poor performances from the Dow Jones, S&P 500, and Nasdaq, reflects growing global recession fears. Dickinson believes that while pullbacks in price are expected, if Bitcoin can maintain levels above $50,000, it might indicate the start of a bull market. However, he cautioned that August and September are historically weak months, so further sideways movement and tests of Bitcoin’s support levels should be anticipated.
Ethereum also suffered a sharp decline, losing nearly 25% of its value within just two hours, marking its worst single-day drop since May 2021. At the time of the report, ETH was trading around $2,190, having recovered from a low of $2,170 earlier in the day. Other major cryptocurrencies also experienced declines exceeding 10%.
The sell-off intensified on rumors of a significant crypto market maker liquidating assets after large Ether transfers to centralized exchanges.
The broader panic selling in Bitcoin and the overall cryptocurrency market was fueled by a decline in financial markets amid fears of a global recession and escalating tensions in the Middle East. Japan’s Nikkei fell by 12.4%, the Nasdaq Composite declined by 2.8%, and micro futures on the S&P 500 dropped by 2.9%.
Among the top 10 cryptocurrencies by market cap, Solana and Dogecoin faced the most considerable losses. Solana dropped nearly 28% over the week to $133, while Dogecoin fell about 23% to just under $0.10.
The recent wave of market declines was exacerbated by a disappointing U.S. jobs report released on Friday, which triggered recession fears that impacted the stock market before the weekend.