- The crypto market has plummeted over the weekend, with Bitcoin down 21.88% throughout the past week of trading.
- Solana was another big loser, with its native token SOL falling more than 30% on the weekly charts.
- Poor employment data and financial results from major tech companies have spurred fears of a recession in the US, causing investment markets across the world to fall.
Ouch, that one hurt.
If your weekend is a time for “phones off” and social engagements, you may have woken up this morning to a rude surprise in your crypto portfolio. The market was, for lack of a better word, smacked by sell pressure, with almost every major cryptocurrency in the top 20 falling by double digit percentages. Optimism of a potential BTC all-time high was on the cards just a week ago, when the coin made its way to US $70k (AU $107k) for the first time in months.
But the hype was short-lived, and Bitcoin has fallen below US $55k (AU $84.5k), losing almost 22% on the week (10% of that coming in the last 24 hours alone).
Related: ETH Drops 20% as Jump Crypto Liquidates Staked Ether Positions, Blockchain Data Indicates
Recession Fears Fuel Bitcoin’s Crash
A lot is going wrong for Bitcoin at the moment.
Several bulls in the derivative markets had their long positions liquidated over the past seven days, resulting in a whopping US $801m (AU $1,231m) leaving the market. This added even more downward price pressure onto a struggling asset.
Meanwhile, recession fears are growing among the US, with early August financial reports showing the jobs market slowing and major tech companies posting less revenue than expected.
The result was losses across the board – not just in the crypto market. However, when economic fears creep into investors, risky, more volatile assets are the first to leave the portfolio, meaning crypto cops the brunt of the sell-off.
Analyst Benjamin Cowen believes the current Bitcoin chart resembles the price action in 2019. Although, in the long-term, this could be bullish for BTC, it does suggest some short-term pain.
As investors stabilise from last week’s sell-off, a key to crypto rebounding will be ETF inflows/outflows, with both spot ETH and BTC funds struggling over the past few days.
Related: Bitcoin and Ethereum ETFs Flows Suffer Setback Amid Lacklustre Trading Day
SOL Tumbles After Nearing US $200
Bitcoin was far from the only coin to suffer through the week’s downtrend. Solana was one of the hardest-hit projects, falling a whopping 32% in the past seven days of trading.
Despite the recent troubles, Solana is still up nearly 2% on the monthly charts – but dreams of SOL reaching US $200 (AU $308) may have to be put on ice for now.
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