Bitcoin Drops Below $57,000, Over 75,000 Liquidated Across the Network, Crypto Market Panic IntensifiesOn September 4th, Bitcoin prices continued to decline, briefly falling below $57,000, marking a one-month low. Bitcoin has dropped over 4% in the past 24 hours, with other major cryptocurrencies like Ethereum also experiencing significant declines
Bitcoin Drops Below $57,000, Over 75,000 Liquidated Across the Network, Crypto Market Panic Intensifies
On September 4th, Bitcoin prices continued to decline, briefly falling below $57,000, marking a one-month low. Bitcoin has dropped over 4% in the past 24 hours, with other major cryptocurrencies like Ethereum also experiencing significant declines. Data from Coinglass shows over 75,000 liquidations across the network in the past 24 hours, totaling $200 million.
The primary driver behind the Bitcoin price drop is concern over the global economic outlook, prompting investors to withdraw from high-risk assets. The recent release of disappointing US July Nonfarm Payrolls data intensified fears of a recession. Bitcoin prices plummeted over 14% in the week ending August 4th, experiencing its largest weekly decline since the FTX exchange collapse in 2022.
The US August Nonfarm Payrolls data is due out this Friday, and traders are closely watching to see if the economy is further slowing. The cryptocurrency market is deeply concerned about a repeat of the events from early August. Shawn McNulty, Head of Trading at liquidity provider ArbelosMarkets, stated that demand for hedging against Bitcoin declines is rising in the options market, both for the period immediately following the release of the US jobs data and for the period after the November Presidential election.
Beyond macroeconomic factors, the Bitcoin market also faces pressure from regulatory scrutiny and capital outflows. Recently, 12 spot Bitcoin exchange-traded funds (ETFs), including those from BlackRock (IBIT) and Fidelity (FBTC), have experienced net outflows for five consecutive trading days, totaling over $765 million. Notably, on September 3rd, these 12 ETFs witnessed combined outflows of $287.8 million, marking the highest daily outflow in the past four months. Fidelity's FBTC led the outflows with $162.3 million.
Furthermore, recent revelations of Bitcoin ATM scams have cast a shadow over the cryptocurrency market. The US Federal Trade Commission (FTC) released a report this Tuesday indicating a sharp increase in financial fraud involving Bitcoin ATMs. In 2023, consumers reported a staggering $114 million in losses due to scams perpetrated through Bitcoin ATMs, representing an almost 900% increase compared to the previous three years.
Currently, panic is intensifying in the cryptocurrency market, with investors taking a cautious approach towards future market trends. Experts advise investors to tread carefully, prioritize risk management, and engage in cautious investment practices.
Here are some additional explanations for the above:
- Liquidation: Liquidation refers to the forced closure of a trader's position when market price movements cause their account balance to fall below the required margin, resulting in the loss of their invested funds.
- Nonfarm Payrolls: Nonfarm Payrolls data measures the number of new jobs created in the US each month, excluding agricultural employment. It serves as a key indicator of the US economy's health.
- Options Market: The options market allows investors to buy or sell options contracts, granting them the right, but not the obligation, to purchase or sell an underlying asset at a specified price.
- Bitcoin ATM: Bitcoin ATMs are automated teller machines that enable users to buy or sell Bitcoin using cash.
- ETF: An exchange-traded fund (ETF) is a type of investment fund that tracks a specific asset or index and is traded publicly on stock exchanges.
Summary:
Bitcoin prices are persistently declining, leading to over 75,000 liquidations across the network and intensifying panic in the cryptocurrency market. Market concerns are fueled by global economic uncertainties, regulatory pressures, and capital outflows. The emergence of Bitcoin ATM scams further undermines market trust. Experts recommend cautious investment strategies and robust risk management practices for investors.
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