Bitcoin (BTC) extended its decline during Asian trading hours on Monday, briefly falling below $50,000 before recovering to nearly $53,000. Despite this rebound, the cryptocurrency remains at its lowest point since mid-February. The downturn is attributed to escalating tensions in the Middle East and concerns over the global economy, which have undermined investor confidence.
The world’s largest cryptocurrency experienced its fourth consecutive day of losses, dipping to $49,112 according to TradingView data. Ether (ETH), the native token of the Ethereum blockchain, fell to $2,060, marking its lowest level since January 3. The CoinDesk 20 index, which tracks some of the most liquid non-stablecoin tokens, saw a nearly 20% decline.
Ether’s nearly 25% drop represents the most severe single-day loss for the token since May 2021. This sharp decline was triggered by rumors that crypto market maker Jump Trading was liquidating assets. On-chain analytics firm spotonchain identified a wallet associated with Jump Trading that transferred 17,576 ETH, valued at over $46 million, to centralized exchanges, suggesting potential liquidation.
The market turbulence resulted in over $1 billion in liquidations within the crypto futures sector, with ether alone accounting for more than $350 million of these liquidations—a significant anomaly.
This sell-off in cryptocurrencies is part of a broader financial market decline driven by fears of a global recession and rising geopolitical tensions. The Nikkei 225 Index in Japan plummeted 12.4%, the Stoxx Europe 600 Index fell 2.8%, and micro futures on the S&P 500 Index dropped 2.9%.
As a result, the crypto fear and greed sentiment index has plunged to its lowest level since early July, indicating heightened investor fear. This index measures volatility, prices, and social media sentiment to gauge market sentiment, with current readings suggesting a period of increased caution among investors.
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