Bitcoin Dips Below $50K Amid Market Turmoil; Ether Faces Worst Plunge Since May 2021

Bitcoin Drops Below $50K as Investors Shift Away from Risk Assets

Bitcoin (BTC) tumbled below $50,000 during Asian trading hours on Monday before bouncing back to nearly $53,000. This marks the cryptocurrency’s lowest point since mid-February. The decline is attributed to rising geopolitical tensions in the Middle East and growing concerns about the global economy, which have eroded investor confidence.

Bitcoin’s drop extended into a fourth consecutive day, reaching as low as $49,112, according to TradingView. Similarly, Ether (ETH), the native cryptocurrency of the Ethereum blockchain, plunged to $2,060, its lowest level since January 3. The CoinDesk 20 Index, which tracks the performance of major non-stablecoin cryptocurrencies, fell nearly 20%.

Ether’s dramatic 25% decline represents its sharpest single-day drop since May 2021. This sell-off was triggered by rumors of a liquidation involving crypto market maker Jump Trading. On-chain data from spotonchain revealed that a wallet linked to Jump Trading transferred 17,576 ETH, worth over $46 million, to centralized exchanges, signaling a potential asset liquidation.

The overall market rout resulted in over $1 billion in liquidations across crypto futures, with Ether alone seeing more than $350 million in liquidated positions, a rare occurrence.

The broader panic in Bitcoin and the crypto market has been fueled by a downturn in traditional financial markets, as fears of a global recession and escalating Middle Eastern conflicts prompted widespread selling. The Nikkei 225 Index in Japan dropped 12.4%, the Stoxx Europe 600 Index fell 2.8%, and micro futures on the S&P 500 Index lost 2.9%.

This turmoil has pushed the crypto fear and greed index to its lowest level since early July, indicating increased market fear—a potential signal of a local bottom. The index, which measures volatility, market prices, and social media activity, suggests that current market sentiment is skewed towards fear rather than greed.