Investing.com – The cryptocurrency market had a rough week, culminating in a sharp decline Monday morning. Major assets like , , and fell further, leading to many more selloffs.
Bitcoin’s price fell below $50,000 for the first time since February, hitting a low of $49,351 before recovering to around $51,000. As a result, the original cryptocurrency’s dominance soared to 58% as altcoin and stock markets crashed, wiping out more than 17% of the total cryptocurrency market cap.
The total market capitalization, which stood at around $2.16 trillion last month, has fallen to around $1.76 trillion at the time of writing.
“The sudden drop in cryptocurrency prices since the beginning of August was something our algorithm anticipated, switching from a bullish stance on BTC and ETH to a bearish stance,” said Tom Cohen, Head Trader at Algoz Technologies.
“Fed Chairman Jerome Powell signaled that rate cuts were coming, which is normally good news, but the market interpreted this, in light of weak economic data, as if the US was sliding into recession and traditional markets were facing heavy losses today.”
Some cryptocurrency experts are predicting that the recent drop in Bitcoin’s price could be the start of a more dramatic fall, citing an impending economic storm and a decoupling of the cryptocurrency from the broader stock market.
Tristan Dickinson, CMO of exSat Network, told Investing.com that Bitcoin is not immune to global macroeconomic events.
“The capitulation of Japanese markets (down 12%) combined with poor performances from the Dow Jones, S&P 500 and Nasdaq to reinforce a broader sense of global recession fears.”
Tristan believes that “pullbacks are inevitable” and that if Bitcoin manages to hold above 50,000, it could mark the beginning of a bull market. “But caution is advised, August and September are historically poor months, so expect sideways action and retests of Bitcoin’s support levels,” he added.
Ethereum also fell, losing nearly 25% of its value in just two hours, its worst single-day drop since May 2021. At the time of writing, ETH was trading at around $2,190, recovering from a low of $2,170 earlier in the day and has seen declines of more than 10%.
The selloff was only compounded by rumors that a major cryptocurrency market maker was liquidating assets after massive transfers of Ether to centralized exchanges.
The panic selling in Bitcoin and the broader cryptocurrency market was fueled by a broader slide in financial markets on fears of a global recession and rising tensions in the Middle East. Japan fell 12.4%, the index fell 2.8%, and micro futures on the market lost 2.9%.
Solana and Dogecoin were the biggest losers among the top 10 cryptocurrencies by market cap. Solana fell nearly 28% over the past week to $133, while Dogecoin fell about 23% to just under $0.10.
The latest round of market declines was compounded by a disappointing U.S. jobs report on Friday, which sparked fears of a recession, hitting the stock market ahead of the weekend.
