Bitcoin, Ethereum and the rest of the market collapse

Last week record levels were within reach, now Bitcoin has collapsed by double digits and the altcoin market is also bleeding. Here are the reasons.

On the night of Aug. 4-5, his Bitcoin and the rest of the market dropped massively, the total market capitalization collapsed by as much as 13%. As a result, the crypto market's valuation stands at $1.88 trillion.

Bitcoin recorded a decline of also 13% in the past 24 hours and is quoting $52,750 at the time of writing. By comparison, just seven days ago the leading crypto currency stood at nearly $70,000.

The correction in the altcoin market is considerably stronger, with Ethereum losing 21%, BNB 18% and Solana plunging 17%.

The sudden crash is also reflected in the mood of market participants; the Fear & Greed Index has gone from greed to neutral and is only a few points away from fear.

One trigger for the flash crash could be the Nikkei stock index. Japan's monetary policy of raising interest rates triggered a stock market crash.

It is trading at around 7% in the minus this morning, with other stock indices also trading deep in the red in pre-trade. These macroeconomic disruptions cannot escape the crypto market either.

There are many reasons for the poor sentiment: disappointing quarterly numbers from tech companies such as Nvidia. Economic concerns have increased significantly as very poor labor market data in the US points to impending recession. Japan triggers a so-called carry trade, with foreign assets coming under selling pressure due to the Bank of Japan's monetary policy change.