Bitcoin has experienced one of its most severe sell-offs in history, plunging nearly 20% within 24 hours, hitting a six-month low. This crash has impacted other major cryptocurrencies, with eight of the top 10 tokens losing over 20% since Sunday. The total market loss exceeds $300 billion, raising concerns about the end of the bull market that began in November 2022.
The downturn is linked to broader economic issues, including significant losses in European and Asian stock markets. A weaker US jobs report and Japan’s interest rate hike have driven investors away from risky assets. Simon Peters of eToro noted that Bitcoin might have bottomed out, signaling a potential recovery.
Two major events earlier this year had fueled Bitcoin’s rally: the approval of the first Bitcoin spot ETF by the SEC and the Bitcoin halving, which reduced mining rewards. Despite the current panic, structural growth in the crypto space suggests resilience against sudden sell-offs. Arthur Firstov of a crypto payments provider highlighted that cryptocurrencies remain highly volatile and sensitive to economic shifts, but recent growth could help withstand future market turbulence.
This year saw Bitcoin peak at $74,000 in March, driven by these events. However, current fears of a US economic slowdown and potential Federal Reserve rate cuts have spurred the recent sell-off, mirroring declines in global stock markets.