Bitcoin fell below $60,000, Ethereum fell below $3,000, and other currencies fell to new lows this year.
On August 4, Beijing time, a reporter from Beijing Business Daily noticed that Bitcoin plummeted again, falling below $60,000 again in the early morning of the same day, which is also the lowest point since mid-July, as of 20 o'clock on the reporter's press time, the latest price of Bitcoin was reported at $60,846, down 1.83% in the day, down 10.07% in the week, and up 1.16% in the month.
Image Credit: Non-Trumpet
Bitcoin fell more than 10% in the week
"Snowflakes are falling around one by one, and assets are shrinking and disappearing little by little...... "This weekend is not friendly to coin players, and it is not an exaggeration to even describe the loss as "a river of blood".
On August 4, the price of bitcoin fell below the $60,000 mark, which also made coin investors call "a big defense". Specifically, Bitcoin has started a series of declines since the end of July, from a high of $71,000 to $67,000, and after a brief sideways, it fell to $64,000 and $62,000 on August 1 and 2, until about 3 a.m. on August 4, when Bitcoin fell below the $60,000 mark and fell to about $59,000.
As of 20 o'clock on August 4, the latest price of Bitcoin was reported at $60,846, down 1.83% in the day, 10.07% in the week, and 1.16% in the month.
In line with Bitcoin, the rest of the virtual currencies also fell across the board. For example, other virtual currencies such as Ethereum, SOL, and Dogecoin have also fallen sharply. Among them, the latest price of Ethereum fell below $3,000, and the latest price was $2,915, down 2.73% in 24 hours, 10.85% in the week, and 11.83% in a month. SOL's latest price is at $143.59, down 5.77% in 24 hours, down 22.1% in the week, and up 1.19% in the month. Dogecoin was last traded at $0.1, down 4.78% in 24 hours and down 17.05% in the week.
For the plunge, Yu Jianing, co-chairman of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, told Beijing Business Daily that the change in market expectations is an important factor in the fluctuation of Bitcoin prices. After the United States Federal Reserve announced that interest rates would remain unchanged and hinted at possible future rate cuts, the market may have priced in some of the benefits in advance. In addition, the United Kingdom's interest rate cut did not boost market confidence, but further increased market uncertainty.
Secondly, the movement of funds in the market also has a significant impact on the price of bitcoin. According to Coinglass, an all-time high of $39.46 billion in Bitcoin contract holdings, reached a record high on July 29. To a certain extent, the contract data represents the market capital's view of the market outlook, and when the contract position is too high, the market may be too unanimously optimistic about the trend of Bitcoin in the short term, leading to the intervention of a large number of leveraged funds. Then the price began to pull back, purging some of the chips and triggering a series of liquidations, resulting in a rapid price decline.
In addition, the bitcoin market has been affected by other factors in the near future. Yu Jianing said that for example, the compensation launch of Mt. Gox has brought some selling pressure, and the transfer activity of the Silk Road Bitcoin address managed by the United States Department of Justice has also caused market concerns, especially the outflow of funds from Ethereum spot ETFs. According to SoSoValue data, as of August 2, the total net asset value of Ethereum spot ETFs was $8.332 billion, and the cumulative historical net outflow has reached $511 million.
It is worth noting that the volatility of Bitcoin's price also reflects the market's reaction to the macroeconomic situation. Yu Jianing believes that the market's response to interest rate cuts may not always be positive, especially in the current global economic uncertainty, investors may be more cautious, resulting in market volatility.
Well-known economist Pan and Lin also pointed out that the main reason for the collapse of virtual currency is the ebb of the technology bubble in the US stocks, resulting in different degrees of retreat of United States technology giants and virtual currency, and the withdrawal of virtual currency is mainly due to Trump's support in the early stage, which led to a short-term surge in virtual currency and then fall. The recent plunge suggests that investors are withdrawing from the hot track.
78,000 people liquidated in 24 hours
With the continuous collapse of virtual currency prices this time, the liquidation of the currency circle is also continuing to intensify.
According to CoinGlass data, at 11 o'clock on August 4, a total of 75,152 people liquidated their positions in the last 24 hours, with a liquidation amount of up to $191 million. In addition, the liquidation situation on the day is still continuing, as of about 20 o'clock on the same day when the Beijing Business Daily reporter was published, in the last 24 hours, it has increased to 78,046 people, and the total amount of liquidation has also increased to 198 million US dollars. Judging from the liquidation situation, the losers are more investors who are bullish on the market.
It is important to note that there are multiple risks associated with the operation of high-risk leveraged contracts, especially when the market is volatile. As Pan and Lin said: "The risk of price fluctuations is very common in the field of virtual currency, in a long-short balance market, someone liquidates at the same time means that someone makes a profit, virtual currency is now more like a deep game asset, which has no intrinsic value, but investors or speculators will still flock to this kind of roulette nature assets." ”
For leveraged contract operation, Yu Jianing also pointed out multi-layer risks, on the one hand, leveraged contract operation amplifies the volatility risk of the market. The use of leverage means that investors can control larger positions with less capital, which increases potential gains but also magnifies potential losses. When the market price moves in an unfavorable direction, the investor's losses can multiply and may eventually lead to a liquidation. For example, the recent sharp drop in the price of bitcoin has further exacerbated the selling pressure in the market due to the forced liquidation of many investors holding long leveraged contracts due to insufficient margin.
Secondly, the high volatility of the digital asset market is another key risk factor. The price of Bitcoin and other digital assets is highly volatile, influenced by a variety of factors, such as market sentiment, macroeconomic data, and regulatory policy changes. Investors trading with leverage in such a highly volatile market are tantamount to dancing on the tip of a knife, and once they make a mistake in judgment, they may face huge losses.
On the other hand, market depth and liquidity issues can also affect the risks of leveraged trading. Compared with traditional financial markets, the digital asset market has lower market depth and liquidity. In extreme market conditions, insufficient market depth can lead to sharp price fluctuations and slippage issues, further increasing the risk of leveraged trading.
Be wary of multiple risks
It should be clarified that in mainland China, there are still strict restrictions on the use and trading of crypto assets. Industry insiders reminded that in the future, regulators may also increase the crackdown on illegal trading in the market, virtual assets are high-risk assets, and any investor should be soberly aware and pay attention to the risks.
For participation in virtual currency-related business activities, domestic regulators are still warning of risks. For example, the official website of the Office of the Financial Commission of the Fujian Provincial Committee of the Communist Party of China said that some financing entities raised so-called "virtual currencies" such as bitcoin and ether from investors through the illegal sale and circulation of tokens. Its essence is an act of illegal public financing without approval, which is suspected of illegal sale of token tickets, illegal issuance of securities, illegal fundraising, financial fraud, pyramid schemes and other illegal and criminal activities.
Yu Jianing further reminded investors to be wary of several major issues, the first of which is the uncertainty of the regulatory environment. Regulatory policies for digital assets are constantly changing in countries around the world, and new regulatory measures can have a significant impact on the market, leading to sharp price swings. Second, the risk of market manipulation is also an issue that cannot be ignored. The digital asset market is susceptible to manipulation by large investors and institutional investors, and large-scale buying or selling may lead to violent fluctuations in market prices, making ordinary investors vulnerable to influence.
In addition, technical risks and security issues are also important for investors to focus on. Yu Jianing believes that the security of digital asset trading platforms and wallets often becomes the focus, and problems such as hacker attacks, technical failures and platform runaways can lead to the loss of investors' assets. Finally, fluctuations in market sentiment and expectations can also have an impact on investors' decision-making. The digital asset market is often strongly influenced by market sentiment, and investors are easily swayed by market sentiment when making trading decisions, leading to irrational investment behavior.
Beijing Business Daily reporter Liu Sihong