The cryptocurrency market largely experienced a downturn on Tuesday (August 6, 2024), despite showing signs of improvement after a sharp decline earlier.
According to data from CoinMarketCap on Tuesday (August 6, 2024) at 07:35 WIB, most crypto assets were in the red. Bitcoin dropped by 2.99% to $55,610.38, with a weekly decline of 16.27%.
Ethereum was also in negative territory, falling 4.91% in the last 24 hours, with a weekly drop of 23.96%.
XRP weakened by 1.18% over the day and recorded a 15.64% decline over the past week.
Meanwhile, Toncoin fell 10.03% in the last 24 hours and suffered an 18.49% decrease over the past week.
Crypto Market Performance (August 6, 2024)
The CoinDesk Market Index (CMI), which measures the market capitalization-weighted performance of digital assets, dropped 4.75% to 2,061.74. Additionally, open interest declined by 10.96% to $48.1 billion.
The fear & greed index reported by CoinMarketCap stood at 32, indicating that the market is in a phase of fear or pessimism concerning the current economic conditions and the crypto industry.
According to Coindesk, Bitcoin and other cryptocurrencies showed some recovery after experiencing sharp declines.
In the previous week, Bitcoin traded near $70,000 with high enthusiasm from traders regarding Trump’s presidential prospects and hopes of making the largest crypto a strategic asset. However, since then, Bitcoin’s price plummeted 30% from its peak, marking the biggest drop in this market cycle.
Although this decline feels brutal, such drops are quite typical during previous bullish markets, noted Alex Thorn, head of research at Galaxy, on Monday.
The speed of this decline is reminiscent of the Covid-19-triggered crash in 2020, said Daniel Cheung, co-founder of digital asset venture firm Syncracy Capital, although this drop was not as severe. BTC once plunged 57% in six days in mid-March 2020.
“Expect crypto to recover relatively quickly given that most of the current selling is due to panic and forced selling,” said Cheung. “Ironically, this drop could open the door to a much bigger bullish market.”
Matt Hougan, CEO of asset manager Bitwise, also compared this weekend’s decline to March 2020 in a market update.
“It feels like we may never recover. The media claims that Bitcoin has failed as a hedge asset,” said Hougan. “However, history shows that this weekend’s decline could be a buying opportunity.”
While the current situation may offer long-term opportunities, short-term risks remain. Markus Thielen, founder of 10x Research, stated that BTC could drop to $42,000 if current economic conditions worsen into a recession.