Bitcoin Plummets Below $53K, Erasing $600M in Leveraged Long Positions

The value of Bitcoin experienced a sharp decline to $52,500 on August 5, in a sudden and dramatic drop that saw a 10% decrease from $58,350 in under two hours. Since the abrupt plunge, Bitcoin (BTC) has somewhat recovered and is currently valued at $54,384 as per TradingView data. This recent price point is a stark reminder of the last time Bitcoin traded below $53,000, which was on February 26 earlier this year following the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States.

In a simultaneous sequence of events, Ether (ETH) also took a hit, plummeting 18% from $2,695 to as low as $2,118. However, ETH has managed to rebound slightly and is now trading at $2,358. The significant downward movement in the market has resulted in over $740 million in leveraged positions being wiped out within the cryptocurrency sphere in the past 24 hours. A notable portion of this loss includes liquidated leveraged long positions amounting to over $644 million, as reported by CoinGlass data.

Investors holding leveraged positions on Ether faced the most significant losses, with approximately $256 million in ETH longs being liquidated, alongside $231 million in BTC longs. This market upheaval coincided with a sharp decline in the Japanese stock market, the Nikkei 225, seeing a 7.1% decrease in its early trading hours. This recent turmoil also led to a massive $500 billion wipeout in the total crypto market capitalization over the past three days, marking the largest 72-hour decline in over a year. Market analysts have attributed these turbulent events to various factors, including weak jobs data in the U.S., slowed growth among leading tech companies in the stock market, and potential mass selling by crypto trading firm Jump Crypto.