Cryptocurrencies hit by the biggest selloff: A Brief Analysis

The cryptocurrency market suffered its biggest three-day sell-off in recent years which was fueled by lingering fears of a possible US recession and growing geopolitical concerns.

The rather volatile crypto space was gripped with skepticism as the most popular crypto, Bitcoin dipped 13% from its Sunday closing price to $51,560, heading for its biggest one-day fall since November 2022 and its lowest level since February.

Ethereum(ETH) fell 17% to $2,277, its lowest since mid-January. Ethereum price on Monday was $2,332, which was 19.71% down from the previous day.

This crypto frenzy was a repercussion of two main reasons i.e., the rising tensions in the Middle East and escalations between Israel and Iran; and the Japanese stock market witnessing the greatest single-day crash ever since 1987.

The biggest crypto selloff coincided with stock markets crash across the Asia-Pacific. Japan’s Nikkei 225 plunged up to 7% on Monday, continuing losses from last week, after the Bank of Japan decided to increase its policy rate to 0.25%, which is the highest level in 16 years.

In the US, the Nasdaq fell 10% from a record high on August 2, after rising worries about expensive Big Tech valuations and a cooling economy. Big Tech firms including Tesla and Alphabet were the contributors to these declines.

Other major firms including Microsoft and Intel contributed to the global slowdown with weaker-than-expected Q2 results. With the upcoming rate cuts in September,  Nvidia also suffered in terms of valuations.

But the silver lining amidst the crash could be Nikkei index jumping by 10.23% today after losing 12% yesterday and showing signs of recovery, which again might keep the global market wheels running. Nikkei is trading at 34,675.46, hitting its largest daily gain since October 2008 and highest ever spike in terms of index points.

Even in the case of the crypto market, the situation is not all gloomy after all. As for crypto movements, Bitcoin is currently trading at $55,794 after a jump of 7.6% in the past 24 hours and Ethereum is currently trading at $2,508 after a surge of 9.6% in the past 24 hours.