Bitcoin plunges below $50,000 and Ethereum tanks 23%. Here’s when one expert says the bloodbath will stop

Bitcoin plunges below $50,000 and Ethereum tanks 23%. Here’s when one expert says the bloodbath will stop
SnapshotMarkets
Bitcoin plummeted below $50,000 for the first time since February. Illustration: Darren Joseph
  • Crypto markets have crashed.
  • The macroeconomic climate is to blame, says one analyst.
  • But another still has hope for price increases in the second half of 2024.

The bloodbath in markets is taking crypto with it.

Over the past 24 hours, global stocks have plunged, volatility has soared, and investors are fleeing to havens like bonds.

Ethereum plummeted 23% to around $2,250, while Bitcoin crashed 16% to around $51,000.

It briefly fell below $50,000 for the first time since February before it recovered.

Free falls in prices have led the total value of the crypto market to drop about 16% below $1.9 trillion, per data from CoinGecko.

Here’s why experts say crypto markets are down and when the bloodbath will stop.

Global turmoil

Crypto isn’t the only market in flux, say analysts.

The broader macroeconomic environment in the US, Middle East, and Asia is also in turmoil.

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On Friday, the US Labor Department reported that the country’s unemployment rate jumped to an almost a three-year high.

This was shortly after the US Federal Reserve hinted at a rate cut in September.

“The market interpreted this, on the back of weak economic data, as the US slipping into recession, and traditional markets are now looking at big losses today,” Tom Cohen, head trader at Algoz Technologies, a crypto asset manager, told DL News.

Bitcoin's price per hour over the past day. Data: DefiLlama

There’s also heightened political tensions in the Middle East, as well as the Japanese central bank’s decision to increase interest rates to strengthen the yen.

And, on Monday, Tokyo’s benchmark stock exchange saw its biggest one-day decline since its inception.

“Economic conditions across the globe, with an election due in the US, tensions in the Middle East, and Japan raising interest rates have all contributed to trading uncertainty,” added Cohen.

Weekend trading also exacerbated market selloffs, when liquidity is low because institutions are usually inactive and fiat transfers are difficult, Ruslan Lienkha, chief of markets at YouHodler, a crypto wallet and trading platform, told DL News.

That’s not to mention that August is historically a weak month for Bitcoin and Ethereum, Cohen said.

What’s next

Eugene Cheung, head of institutions at Bybit, is still bullish.

“The underlying fundamentals for Bitcoin and Ethereum remain exceptionally strong,” he told DL News.

He pointed to increased institutional adoption of crypto, highlighting Morgan Stanley’s recent decision to let wealth advisers pitch Bitcoin exchange-traded funds to clients.

And he said that anticipated US rate cuts, the US’s growing national debt, and increased political support for crypto all point to price gains in the second half of 2024.

“Bitcoin has the potential to break out of its current range and reach targets of $86,000 or even $105,000,” Cheung said.

Crypto market movers

  • Bitcoin is down 16% over the past 24 hours to trade at $51,048.
  • Ethereum is down 23% to trade at $2,252.

What we are reading

Justin Sun denies liquidation rumours as crypto market slides almost 17%DL News

Ethereum Drops Below $2,300 Amid Rumors of Jump Crypto Unwinding PositionsUnchained

CFTC subpoenas Ben ‘BitBoy’ Armstrong’s former company in fraud investigation, asks about activity for tokens such as BENThe Block

Why crypto’s Fairshake super PAC has raised 20% less money than people thinkDL News

Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.