Cryptocurrencies plunge! Bitcoin falls below $60,000 mark, Ethereum drops by 10%

According to Zhitong Finance, on Wednesday morning, cryptocurrency prices generally fell, including Bitcoin experiencing its largest drop since the global market turmoil in early August, and the second-largest token Ethereum also plummeting. Bitcoin, the largest digital asset, fell to near $58,000 at one point, marking its biggest drop since the crash on August 5th, while Ethereum dropped nearly 10%. At the time of writing, Bitcoin fell by 6.80% to $59,129.1, breaking below the $60,000 mark, and Ethereum dropped by 9.42% to $2,434.53.

Steven Lubka, head of private clients and family offices at Swan Bitcoin, said: "The sharp decline in the crypto market has triggered leveraged liquidation. This move appears to have been triggered by a substantial drop in Ethereum, which has been competing with Bitcoin throughout the year."

According to CoinGlass data, there have been $93.52 million in Ethereum long liquidations in the futures market, and approximately $85.93 million in Bitcoin liquidations, forcing traders to sell assets at market prices on centralized exchanges to settle debts.

Furthermore, concerns about the U.S. government potentially selling confiscated tokens are one of the obstacles in this market. Some market participants pointed out that on Tuesday, there was news that a federal grand jury in Washington, D.C. had returned a revised indictment in the criminal election interference case against former President Donald Trump, accelerating the retreat of cryptocurrencies.

Trump has positioned himself as a candidate supportive of cryptocurrencies in the upcoming U.S. presidential election. Democratic candidate and Vice President Kamala Harris has not publicly expressed her views on the industry. Bartosz Lipiński, CEO of the crypto trading platform Cube.Exchange, said: "Traders dislike instability, and in such an environment, they tend to hedge and cash out. Today's situation may be just that."

Last week, Federal Reserve Chairman Powell issued the clearest hint yet that the Fed is preparing to lower benchmark interest rates from their multi-decade highs. Tony Sycamore, market analyst at IG Australia Pty, said that for many assets, "the Fed is basically in play," making Bitcoin falling below the 200-day moving average price "a bit worrying."

Traders are awaiting the latest earnings report from NVIDIA Corporation (NVDA.US). NVIDIA is a leader in the field of artificial intelligence and has been driving global stock markets to new highs. Sycamore said that the report scheduled to be released later on Wednesday could impact investors' interest in high-risk investments like Bitcoin For cryptocurrencies and risky assets, August is usually a calm month, but this year's volatility is particularly intense. However, cryptocurrencies are no strangers to sharp pullbacks in a bull market. Bitcoin has been trading in the range of $55,000 to $70,000 since April and is currently still in a safe zone.

Despite continuous inflows of funds into US exchange-traded funds (ETFs) tracking the original cryptocurrency Bitcoin, the price of Bitcoin has still experienced a sharp decline. Ethereum has maintained a moderate 7% increase so far this year. Bitcoin, on the other hand, has risen by 41% this year, reaching a historical high of $73,798 in March. It has since been trading below this level for a long time, raising doubts about the sustainability of this rebound.

In response to this, Lubka added: "Leverage-driven volatility is often an excellent buying opportunity. While I expect the market to buy on Bitcoin's decline, Ethereum may continue to struggle until investors have reasons to be bullish on the asset again."

Bitwise asset management analyst Ryan Rasmussen said: "This is the kind of liquidation and price volatility we see in a bull market."