There is a massive bloodbath in the crypto space following a drop in Bitcoin, the largest cryptocurrency by market cap. Earlier today, Bitcoin fell below $50,000, hitting a low of $49k before slightly reviving back toward $51,000.

At press time, data on Coinmarketcap showed Bitcoin at $52,612, after suffering a 13.31% drop in the last 24 hours. The current dip in the crypto asset market is significant, with data indicating a drop to levels not seen since February.

Bitcoin Value Falls Due to Increased Selling Pressure

The recent dip can be attributed to the massive crypto liquidation the space has recorded since Aug 2. In the past three days, the market has witnessed its largest sell-off in nearly a year, with a staggering $500 billion loss, accompanied by a 4% drop in S&P 500 equities.

Recession fears, and geopolitical tensions, especially in the Middle East are factors that most likely have impacted the massive crypto selloffs. 

In addition, the rise in the interest rate of the Japanese Yen and the loss in the global stock market, for instance, Japan’s Nikkei and TOPIX indices must have also caused the increased selling pressure in crypto.

Ether Drops Below $2,200

The crypto market has witnessed a synchronized downturn, with other crypto assets following Bitcoin’s price correction. Further data on Coinmarketcap showed that the total market cap fell from about  $2.16 trillion to around $1.76 trillion on Aug. 5.

For instance, Ether, the second-largest crypto asset dropped below $2,200 on Monday morning, selling at its lowest level since January. The asset has bounced back in the last few hours as it is trading at $2,325 at press time.

Ether’s drop is significantly linked to Jump Trading’s liquidation on Aug 4. The  Chicago-based trading firm, following an ongoing investigation by the U.S. Commodity Futures Trading Commission (CFTC), liquidated a significant portion of its Ethereum holdings, worth about $500 million.

Jump trading transferred a majority of the liquidated assets to Binance, OKX, Bybit, Coinbase, and Gateio exchanges.

The crypto space is experiencing a tentative recovery, with some assets regaining lost ground, however, the overall market sentiment remains cautious, awaiting the outcome of the upcoming US presidential election.

One of the presidential candidates, Donald Trump, has shown notable support for the space in recent months.

Apart from accepting crypto donations for his campaign, he announced at the Bitcoin Conference in Nashville, Tennessee that he would replace the US SEC’s chairman Gary Gensler, on his first day in office, if he wins the election.