Bitcoin (BTC) Hits 5-Month Low After Falling Below $50,000

beincrypto.com 05 August 2024 09:28, UTC

For the first time since February, Bitcoin’s (BTC) price has fallen below $50,000. In the early hours of August 5, the coin ranked as the most valuable cryptocurrency dropped as low as $49,032.

The decrease is part of a broader crypto sell-off that has caused panic in the market. Further, this development was also a result of macroeconomic factors affecting the crypto ecosystem.

Global Market Changes Force Bitcoin Down

According to Bloomberg, the Bank of Japan’s unexpected increase in interest rates is one reason Bitcoin and the crypto market at large are feeling the heat today. Following the development, the Japanese yen (JPY) has strengthened against the U.S. dollar (USD).

Therefore, traders who borrowed will have to pay higher interest rates on the JPY they lent. Other assets, such as the Nasdaq futures and S&P 500, are also affected, plunging by 5% and 3%, respectively.

As a result of this development, Bitcoin’s market cap, which was $1.37 trillion on July 29, fell below $1 trillion before a recent rebound saw the value jump above the threshold again.

Bitcoin Market Capitalization. Source: CoinGecko

Following the development, different comments have spread around X, with some mentioning that the market could be heading into a bear phase.

For Whale Panda, this collapse has been one of the most brutal ones in a long time.

“BTC went from $70k to $52k in a week (-26%). ETH went from $3400 to $2100 (-39%). This has been one of the most brutal performances in a long time. The pseudonymous Bitcoin holder wrote on X.

BTC Price Prediction: Down, But Not Out

Meanwhile, at press time, BTC had returned above $50,000. Specifically, the coin trades at $51,313. The bounce could be attributed to the Relative Strength Index (RSI) being in the oversold territory.

The RSI measures momentum, and also spots overbought and oversold levels. Readings above 80.00 indicate that a coin is overbought and could lead to a downward reversal. However, a rating below 30.00, as in Bitcoin’s case, indicates an oversold point, propelling the bullish reversal.

Read More: Bitcoin (BTC) Price Prediction 2024/2025/2030