- Bitcoin price declines as US economic activity slows down.
- Genesis moves $1.5 billion in Bitcoin and Ethereum for creditors' repayments.
- Israel-Iran tensions rise, causing a decline in BTC.
- On-chain data shows no signs of a buy-the-dips scenario, 267,842 traders were liquidated for $1.02 billion.
Bitcoin's (BTC) price shows weakness on Monday, trading 12% lower at $50,898 at the time of writing, amid a slowdown in US employment as shown in the Nonfarm Payrolls (NFP) report for July published on Friday and rising Israel-Iran tensions. The situation was further impacted by bankrupt crypto lender Genesis moving $1.5 billion in Bitcoin and Ethereum for creditors’ repayments, with no signs of a buy-the-dip scenario from traders, who faced $1.02 billion in liquidations. This confluence of factors has led to a significant downturn in global markets, with Bitcoin prices dropping below $50,000 at the start of the week.
Daily digest market movers: Bitcoin drops as US economy slows down
- Recent US economic reports reveal rising unemployment and reduced business investments. July's unemployment rate surged to 4.3%, and Bitcoin's price has since crashed below $50,000, reflecting a broader downturn in the crypto market.
- In the ongoing Gaza conflict, the brink of a potential "World War 3 teaser" has emerged due to rising tensions between Israel and Iran, sparked by the assassination of Hamas leader Ismail Haniyeh in Tehran. This escalation has led to a significant downturn in global markets, with Bitcoin prices plummeting below $50,000 on Monday.
BREAKING: Israel is preparing for a multi-day attack by Iran and Hezbollah - NBC pic.twitter.com/RFrgmVmd7k
— Radar (@RadarHits) August 4, 2024
- Santiment's data indicates that the current fall in Bitcoin and Ethereum is similar to the decline in early July, but there is a noticeable lack of enthusiasm for buying the dip. Traders might start showing interest if Bitcoin approaches $50,000 or Ethereum hits $2,000, which are key psychological levels.
Bitcoin Santiment Social chart
- According to Arkham Intelligence showed on Friday, the bankrupt crypto lender Genesis transferred $1.5 billion in Bitcoin and Ethereum to repay creditors, a move likely fueling Fear, Uncertainty, and Doubt (FUD) among traders and contributing to Bitcoin's recent price decline.
BREAKING: GENESIS MOVING $1.5B BTC + ETH FOR CREDITOR REPAYMENTS
— Arkham (@ArkhamIntel) August 2, 2024
Wallets linked with Genesis Trading have moved 16.6K BTC ($1.1B) and 166.3K ETH ($521.1M) in the past hour - likely for in-kind repayments to creditors.
BTC: bc1qmetf6pu6ghr6fv92209sw5x9t5999562t8wmux
ETH:… pic.twitter.com/5Jtxqx8mxT
- According to the Liquidation Heatmap chart from Coinglass, in the past 24 hours, 267,842 traders were liquidated, for a total of $1.02 billion. The largest single liquidation order happened on Huobi—BTC/USD, valued at $27 million. If BTC continues to decline, more traders will be liquidated, fueling Fear, Uncertainty, and Doubt (FUD) among traders.
Liquidation Heatmap chart
Technical analysis: BTC shows weakness as it breaks below the ascending trendline
Bitcoin's price fell below the ascending trendline (drawn by joining multiple swing lows from July 5) on Friday, leading to a 5.6% decline over the next two days. As of Monday, it is trading 12% lower at $50,898, having tested the daily support level at $49,917.
If BTC closes below the daily support at $49,917, it could continue to crash 11% and retest its weekly support at around $44,297.
The Relative Strength Index (RSI) and the Awesome Oscillator on the daily chart have dropped below their neutral levels of 50 and zero, respectively, signaling a bearish trend according to these momentum indicators.
BTC/USDT daily chart
However, a close above the August 2 high of $65,596 would change the market structure by forming a higher high on the daily timeframe. Such a scenario might drive a 6% rise in Bitcoin's price to retest its weekly resistance at $69,648.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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