- The cryptocurrency market cap has plummeted to $1.92 trillion, which is a significant drop.
- Factors such as geopolitical tensions and economic uncertainties have aggravated the market decline.
The global cryptocurrency market has seen a notable decline since the beginning of the month.
This drop has led to a significant outflow of the global crypto market cap, which stood at $1.92 trillion at the time of writing, a notable drop from the $2.5 trillion seen at the end of July and down roughly 13.1% over the past day.
Factors behind the current cryptocurrency crash
Micheal Van De Poppe, a well-known cryptocurrency analyst, has described The current period of market decline was described as one of “capitulation,” in which investors quickly sold their holdings, leading to a sharp drop in prices.
This pattern, according to the analyst, has emerged strongly after the listing of the Ethereum [ETH] ETF, which, instead of boosting the market, caused a massive outflow from Grayscale’s Trust.
This represented significant selling pressure for Ethereum.
Another factor contributing to the downturn is liquidation by major trading firms such as Jump Trading, which dumped substantial amounts of Ethereum shortly after the ETF was introduced.
This aggressive selling activity is indicative of heightened fears in the market and a shift towards risk aversion among investors.
In addition, global political tensions and adverse economic indicators, including escalating conflicts and poor economic data from several countries, have pushed the market towards one of its lowest points this year.
When do I bounce?
Regardless of the reasons, the impact of the cryptocurrency market crash has been quite severe on the market.
According to Coinglass data, 279,901 traders were liquidated in the past 24 hours, with total liquidations worth over $1 billion.
Fuente: Coinglass
Of this total liquidation, BTC and ETH traders were the most affected. The liquidations of Bitcoin [BTC] amounted to $367 million at the time of writing, while Ethereum liquidations were $349.75 million.
Meanwhile, Santiment, a leading market intelligence platform, has reported a notable uptick in discussions about buying stocks on dips following the recent sharp drop in cryptocurrency prices.
However, the increase in discussions has not reached the levels that would normally be expected with such significant market declines.
The platform predicted a more pronounced reaction as US markets open, suggesting emotional selling could accelerate the timing of a cryptocurrency rally.
However, the cryptocurrency market is sure to recover as major drops like this can be considered normal, especially considering the factors behind them.
However, the question remains when this will happen. the recovery will take place.
Considering similar events in the past, a rally in the cryptocurrency market is likely to occur once the initial panic subsides or perhaps when major assets like Bitcoin and Ethereum reach overbought levels, leading to a rally.
This is an automatic translation of our English version.
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