Crypto Crash: 208,000 Traders Lost $801M as Bitcoin Falls Below $53,000

Key Takeaways:

• Bitcoin and Ether experienced a significant drop as the crypto market crash continued.
• Over $801 million in leveraged positions were liquidated in the last 24 hours.
• Economic concerns and stock market sell-offs also impacted cryptocurrency prices.

Crypto Market Crash: Bitcoin Falls Below $53,000

The crypto market, including Bitcoin and Ether, experienced a massive drop over the weekend, crashing to levels not seen in several months.

Starting at $60,684.38 on Sunday, the Bitcoin price struggled between bearish and bullish forces until it dropped to $57,303 in the afternoon.

After that, the bulls pushed the top crypto back over $59,000, but after a double-top just above $59,400, the bears again took control of the price.

The price of Bitcoin dropped to as low as $52,500 on August 5, falling 10% from $58,350 in less than two hours. This was the first time Bitcoin traded below $53,000 since February 26, earlier this year, when the price went up after spot Bitcoin exchange-traded funds (ETFs) were approved in the United States.

Based on data from Hedge With Crypto, Bitcoin's price has fallen by more than 11% in the last 24 hours. As expected, both major and minor alternative cryptocurrencies have also experienced declines.

Specifically, Ethereum has seen a 21% loss, BNB has dropped by 15.1%, Solana has lost 14%, and Dogecoin's value has slipped by 15.6% in the past 24 hours.

These significant downturns in the cryptocurrency market have resulted in a 13% drop in the global crypto market capitalization. Currently, the market capitalization stands at approximately $1.88 trillion, down from over $2.3 trillion a few days ago.

Traders Lost Almost $1 Billion

Real-time data from Coinglass indicates that this rapid downward trend has led to the liquidation of over $801 million in leveraged positions across the entire cryptocurrency market in the last 24 hours.

Of this amount, traders lost $701.31 million from leveraged long positions and about $100 million from liquidated short positions. The most significant losses were in leveraged exposure to Ether, with over $297 million in long positions and approximately $238 million in long positions for Bitcoin being forcibly closed.

Reasons Behind the Crypto Crash

The main reason for the recent crypto crash is that Genesis Global Capital, a bankrupt crypto lender, has finished its restructuring and repaid its debts to creditors after three years.

As Bloomberg reported, the lender has started immediately distributing about $4 billion in cryptocurrencies and fiat currencies to its creditors. This led many investors to liquidate their holdings, contributing to a drop in the prices of many struggling cryptocurrencies.

The crash in Bitcoin and Ether prices can also be linked to various other reasons. Recently, payroll numbers revealed that only 114,000 jobs were added in July, which is significantly lower than expected. This has led to concerns about a possible economic downturn, causing a 2.43% drop in the Nasdaq and a 1.84% drop in the S&P 500.

Related: Bitcoin Firms MicroStrategy, Block and Marathon Post Mixed Q2 2024 Earnings

Additionally, global stock markets are experiencing widespread sell-offs, with Japan's Nikkei 225 and Topix indices dropping by about 7% in the Asian morning session, approaching the bear market territory. This came after the Bank of Japan raised its key interest rate last week from zero to about 0.25%.