The price of Bitcoin plunged below $50,000 on Monday, reaching lows not seen in over six months amid a widespread global market sell-off.
BREAKING: #Bitcoin falls below $50,000 pic.twitter.com/11og9GoSyi
— Bitcoin Magazine (@BitcoinMagazine) August 5, 2024
Bitcoin dropped as much as 20% to around $49,000 before rebounding slightly to trade above $50,000 again. The steep decline coincided with crashing stock markets worldwide, fueled by recession fears.
Japan’s Nikkei index plunged over 8%, posting its worst two-day rout since 1987. Asian and European markets are experiencing some of the worst losses ever. In the U.S., the tech-heavy Nasdaq entered correction territory after sliding over 20% from its peak. The S&P 500 fell nearly 4% over the past week.
Rising interest rates, disappointing tech earnings, and signs of economic weakness like Friday’s U.S. jobs report have rattled investor confidence. The Bitcoin market followed stocks lower, with Bitcoin falling below $50,000 for the first time since February. The overall Bitcoin market cap shed nearly $200 billion over the weekend.
The Bitcoin fear and greed index dropped into “fear” territory as prices approached six-month lows. But Bitcoin has recovered from similar crashes many times before, including a 20% single-day plunge last November.
Still, some analysts warn that continued declines could signal the bull market’s end and lead to an extended bear phase. Others argue that it is just a slight correction before a new all-time high, as the global market injects more liquidity.
The $50,000 level is seen as an important support area for Bitcoin. The latest Bitcoin crash exemplifies the asset’s volatility and correlation with speculative equities. But Bitcoin has rebounded from previous sell-offs before resuming its long-term uptrend.