Crypto Black Monday: Market Erases $500 Billion in Days

Crypto Black Monday: Japan Stock Market Rate Hike Causes Crypto Crash

The crypto market has taken a massive hit, losing over $500 billion in just a few days. This dramatic decline has pushed traders into a deep bearish sea, echoing a similar pattern from August 2023.

The market is down significantly today, with Bitcoin facing an intense sell-off not seen in months. The BTC token has dropped over 18% since the start of the month, indicating that the crypto winter has advanced considerably, shaking the entire crypto space. Several factors have contributed to the heightened fear among market participants.

Japan Stock Market

One significant trigger is Japan's recent rate hike of 25 basis points in interest. This increase has spiked all risk assets, including Bitcoin and Ethereum, which have dropped by over 18% and 22% respectively. Japan is witnessing one of its worst losses since 1987, with the Nikkei selling off at a double top of the real estate bubble peak from 34 years ago. This sell-off is speculated to be even larger than the 'Black Monday' crash of 1987.

Is it a Crypto Black Monday

Globally, financial collapses are spreading across markets, raising questions about whether this is a Black Swan event or another Black Monday. South Korea has halted all sell orders, and the Magnificent 7 stocks in the United States have erased nearly $500 billion overnight. Additionally, the US employment rate has dropped, increasing the likelihood of a recession.

What’s Next for the Crypto Markets? Will Bitcoin Recover?

Despite the prevailing fears, some bulls and retail traders see this as an opportunity to buy the dip. Social sentiments have spiked with discussions about the right time to buy, but data from Santiment indicates that levels remain below the required limit, suggesting a bigger drop could occur when the US markets open.

"Discussions about buying have spiked, but not as much as you may think on such a dramatic drop. Expect a bigger reaction as the US wakes up for their Monday morning shock. Emotional sell-offs will only accelerate the timing of crypto’s rebound," according to Santiment.

Current market sentiments are extremely bearish, as reflected in the fear and greed index plunging close to 27. While markets have dropped euphorically, a rebound is expected once sentiments shift from heavily bearish to neutral. Although some buyers are seizing this opportunity, the markets are likely to remain under bearish influence for some time.

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