The value of Bitcoin plunged to as low as $52,500 on August 5th, experiencing a sudden drop of 10% from $58,350 within a mere two hours. However, Bitcoin (BTC) has since recovered slightly and is currently valued at $54,384 according to data from TradingView. This sharp decline below $53,000 marks the first time since February 26 of this year, when Bitcoin surged following the approval of spot Bitcoin exchange-traded funds in the United States.
In the same timeframe, Ether (ETH) also suffered a drastic fall, plummeting 18% from $2,695 to a low of $2,118. As of now, ETH has rebounded slightly, trading at $2,358 as reported by TradingView. The recent downward movement has led to over $740 million in leverage positions being liquidated in the cryptocurrency market, with approximately $644 million in leveraged long positions being wiped out.
Notably, traders who leveraged Ether were hit the hardest, with over $256 million in ETH long positions being liquidated, alongside $231 million in BTC long positions. The sudden drop in crypto asset prices coincided with a significant sell-off in the Japanese stock market, the Nikkei 225, which plunged by 7.1% during early trading hours.
The rapid flash crash resulted in the total crypto market capitalization decreasing by as much as $500 billion in the past three days. This decline, the most significant in over a year, has been attributed to various factors including weak job data in the US, slowed growth among leading tech companies in the stock market, and concerns of widespread selling from crypto trading firms like Jump Crypto.
Vocabulary List:
- Plunge /plÊŒndÊ’/ (verb): To fall or drop suddenly and dramatically.
- Liquidated /ˈlɪkwɪdeɪtɪd/ (verb): To sell off assets often to pay debts or as part of a financial settlement.
- Drastic /ˈdræstɪk/ (adjective): Extreme or sudden in effect or action.
- Capitalization /ˌkæpɪtəlʌɪˈzeɪʃən/ (noun): The total value of a company’s outstanding shares of stock.
- Surged /sÉœrdÊ’d/ (verb): To rise quickly and suddenly often used in the context of prices or trends.
- Concerns /kənˈsɜrnz/ (noun): Things that cause worry or anxiety.
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