Bitcoin crashes below $53K, wiping out $600M in leveraged longs

Tom Mitchelhill7 hours agoBitcoin crashes below $53K, wiping out $600M in leveraged longsA sudden crypto market nosedive has wiped out over $600 million in leveraged long positions, as Bitcoin, Ether and other cryptocurrencies plunged sharply.29082 Total views28 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onThe price of Bitcoin crashed as low as $52,500 on Aug. 5 in a sudden drawdown that saw the leading cryptocurrency plunge 10% from $58,350 in less than two hours.

Bitcoin (BTC) has since regained some ground and trades for $54,384 at the time of publication, according to TradingView data. The price of Bitcoin fell sharply on Aug. 5, hitting lows of $52,500

The last time BTC traded below $53,000 was on Feb. 26, with the price rallying following the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States. 

The price of Ether (ETH) also plummeted 18% from $2,695 to as low as $2,118 within the same time frame. ETH has since bounced slightly and traded for $2,358 at the time of publication, according to TradingView data. Ether also took a nosedive, hitting lows of $2,300 on Aug. 5. Source: TradingView

Speaking to Cointelegraph, eToro market analyst Josh Gilbert said crypto is often a “leading indicator of sentiment,” adding that when investors panic or look to deleverage, crypto is often the first asset on the list. 

“However, in these scenarios, it’s important to zoom out. Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert added.

Despite the brutal drawdown, Gilbert shared an optimistic outlook for crypto in the coming months:“When you invest in crypto assets, you’re stepping into the ring of volatility. This is a small jab for crypto, not even a black eye. We’ve got more rounds left of this bull market before the bell rings."

The sharp downward move has now seen over $740 million in leverage positions wiped out across the crypto market in the last 24 hours, with just over $644 million in leveraged longs being liquidated, according to CoinGlass data. Over $650 million in leveraged long positions were wiped in the last 24 hours. Source: Coinglass

Notably, traders looking to gain leveraged exposure to Ether were the hardest hit, with over $256 million in ETH longs cleaned up, while $231 million in BTC longs were forcibly closed.

Related: Bitcoin eyes $58K CME gap next as 8% BTC price rout sees longs "rekt"

There has been a significant increase in the open interest in ETH over the last few months, with traders flocking to gain exposure to the asset in the lead-up to and aftermath of the approval of spot Ether ETFs in the US. 

The sharp downturn in crypto asset prices came amid a sharp sell-off in the Japanese stock market, with the Nikkei 225 down 7.1% in early trading hours.

On Aug. 2, Japanese bank stocks notched their worst day of performance since 2008, buffeted by a decision from the country’s central bank to hike interest rates. 

The sudden crash saw as much as $500 billion wiped from the total crypto market capitalization in the last three days — the largest 72-hour wipeout in well over a year.

Several market commentators have attributed the recent turmoil to weak jobs data in the United States, slowed growth among market-leading tech companies in the stock market, and concerns about mass selling from crypto trading firm Jump Crypto.

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