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.