Key Points
- Bitcoin (BTC) price experiences a significant 12% drop amidst a general decline in the global stock market.
- Over $1 billion liquidated from the leveraged crypto market, with $363 million from Bitcoin traders.
Bitcoin (BTC) led the crypto industry in heavy losses in the last 24 hours, with a drop of over 12 percent during the early Asian session.
The total crypto market cap also fell by more than 16 percent in the past 24 hours, settling around $1.87 trillion on Monday during the mid-European session.
Ethereum and the Altcoin Market
According to the latest crypto market data, the Ethereum price led the altcoin industry with a decline of more than 21 percent in the past 24 hours.
This led to a liquidation of more than $1 billion from the leveraged crypto market, mostly involving long traders. Bitcoin traders also saw more than $363 million liquidated in the past 24 hours.
Correlation with Global Stock Market
The Bitcoin price and the entire crypto industry have been following the general expected monthly performance, where August and September are typically bearish. However, today’s Bitcoin drop, similar to the post-FTX crypto crash, was triggered by the poor performance of the Japanese stock market.
Japan’s NIKKEI 225 Index fell 12.4 percent on Monday, and the Asia Dow Index USD dropped nearly 7 percent. European stock indexes have also dropped more than 2 percent, with US stock indexes expected to fall after the market opens.
Robinhood Markets Inc (NASDAQ: HOOD), which saw its stock market plunge over 20 percent since Friday, halted its 24-hour trading due to fears of a liquidity crisis. Warren Buffett has also liquidated a significant portion of his stock portfolio and currently holds more cash than Ethereum’s market cap.
Meanwhile, the US spot Bitcoin ETFs ended last week with a net cash outflow of about $80 billion, ending the winning streak for the prior four weeks.
Is the Crypto Bull Cycle Over?
With the BTC price teasing below $50K for the first time since February, and Bitcoin’s fear and greed index dropping below 26, signaling extreme fear, traders are questioning whether the crypto bull market is over.
Historical data shows that Bitcoin price experienced major corrections before entering its parabolic phase of the bull cycle. If Bitcoin price follows historical trends, a V-shaped rebound could happen in the fourth quarter.
Bitcoin price has a robust support range between $47K and $50K, which could offer a needed lifeline to the bullish sentiment. The US Fed is expected to initiate much-anticipated interest rate cuts as early as next month, ahead of the upcoming general elections.
