Bitcoin prices plummeted by more than 15%, dropping below $50,000 amidst growing fears of a U.S. recession and escalating geopolitical tensions in the Middle East on Monday, August 5.
This marked the first time since February that Bitcoin dipped below this threshold before rebounding to around $52,000.
Experts suggest that the cryptocurrency could face further declines.
Recent analysis by CryptoQuant indicates that Bitcoin could potentially drop to $40,000, signaling a challenging period for investors.
The crypto analytics platform highlights that traders are currently experiencing the most negative unrealized profit margins since November 2022.
This decline reflects a significant shift in market sentiment, with selling pressure on Bitcoin mounting as traders attempt to mitigate losses amid an uncertain economic backdrop.
According to observations by IntoTheBlock, the percentage of profitable holders has decreased to 75% due to the massive drop in Bitcoin.
This represents a significant decline and the lowest level seen since January when Bitcoin’s price formed a local low around $39,000.
Bitcoin is not the only asset affected by strong selling pressure.
Ethereum plunged more than 22% over the past 24 hours, dragging its price down to $2,264 on Monday evening.
According to CryptoPotato, during the same period, Solana and XRP also fell by over 18.2% and 16.6%, respectively, along with other markets.
Meanwhile, Dogecoin dropped more than 20%.
Over $1 Billion Liquidated
The market bloodbath triggered $1.08 billion in cryptocurrency futures contract liquidations over the past 24 hours.
According to data collected by CoinGlass, long positions worth $919.62 million were liquidated, while short trades accounted for $162.45 million.
Bitcoin was the hardest hit, with over $371 million liquidated, including $310.26 million in long positions and $61.22 million in short positions.
Ethereum followed suit, with nearly $353 million liquidated during the same period.
This included $303 million in long positions and $49.6 million in short positions.
Solana and Dogecoin also experienced significant liquidations, amounting to $60.91 million and $13.14 million, respectively.
In total, 283,280 traders were liquidated in the past 24 hours, with the largest single liquidation order occurring on Huobi for BTC-USD, worth $27 million.
This downturn subsequently led to the crypto fear and greed index indicating “fear,” reaching its lowest point since early July.