Bitcoin Tumbles to $53K Amid Market Panic
Bitcoin tumbled to $53,000, hitting levels not seen since February. Ether turned negative for 2024. Panic gripped the markets, causing a broad weekend selloff in crypto.
Bitcoin and Ether's Sharp Decline
In the past 24 hours, Bitcoin fell by 12%. Over the past week, it dropped 20%. Ether has dropped 30% in the last week and 21% in the last 24 hours. The CoinDesk 20 Index also fell by 12% in the last 24 hours. This decline erased Ether's year-to-date gains, making it 3% lower than on January 1.
Trigger for the Selloff
The Bank of Japan’s recent interest rate hike triggered this market correction. This hike caused the yen to rise and the Nikkei stock index to drop. By early Monday, the Nikkei was down 6%, falling 15% over the past three sessions and 20% from its mid-July peak.
Impact on U.S. Markets
The selloff in Japan affected U.S. markets. The Nasdaq fell more than 5% in the final two sessions of last week. Nasdaq futures dropped another 2.5% on Sunday evening. The Federal Reserve’s recent stance also surprised traders. Although it held rates steady, it seemed unsure about cutting rates in September.
Market Reactions
Traders now expect lower U.S. base rates in September. There is a 100% chance of rate cuts, with a 71% chance of a 50-basis point cut and a 29% chance of a 25-basis point move. The U.S. 10-year Treasury yield dropped to 3.75% on Sunday evening from 4.25% a week ago.
FAQs
Why did Bitcoin drop to $53,000?
Bitcoin fell due to a broad selloff in crypto markets. This selloff was triggered by the Bank of Japan’s interest rate hike and subsequent market reactions.
How much has Bitcoin fallen recently?
Bitcoin dropped by 12% in the past 24 hours and 20% over the past week.
What caused the broader market selloff?
The Bank of Japan’s interest rate hike caused the yen to rise and the Nikkei index to fall. This spread to U.S. markets, where the Nasdaq also dropped significantly.
What is the current outlook for interest rates?
Traders expect U.S. base rates to be cut in September. There is a 100% chance of rate cuts, with most expecting a 50-basis point cut.
How has Ether been affected?
Ether turned negative for 2024, dropping 21% in the past 24 hours and 30% over the past week. This erased its year-to-date gains.
This market turbulence highlights the interconnected nature of global financial markets. Bitcoin’s plunge to $53K shows how external factors can impact crypto prices.
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