Bitcoin Plunges to February Lows, Triggers $600M in Long Liquidations; ETH Drops Below $3K

Amid the ongoing market downturn, Bitcoin, the largest crypto asset by market cap, has plunged to its lowest value since February.

Bitcoin’s price has taken another hit, dropping to its lowest value since February amid the ongoing market downturn. This price dip brought the token to around $55,000, triggering nearly $600 million in longs liquidations, the most significant single-day liquidation since mid-April.

Major Liquidations Hit the Market

Over the past 24 hours, long positions, or bets that Bitcoin prices would rise, have seen liquidations amounting to over $500 million. This marks the most significant single-day liquidation event for the virtual currency market since mid-April.

On the other hand, short positions, which are bets on the price falling, saw about $80 million in liquidations.

The drop to $55,000 on Thursday represents a substantial fall from Bitcoin’s recent all-time high of $73,750. Although the price has slightly rebounded to around $55,550, according to CoinGecko data, Bitcoin has struggled to regain a stable footing above the $60,000 threshold.

The market suffers bearish investor sentiment following a $2.7 million transfer from defunct exchange Mt. Gox to an unknown wallet.

BREAKING

Mt Gox moves 47,228 BTC ($2.71 billion dollars) from cold storage to a new wallet. pic.twitter.com/3ZdSlC1IX2

— Arkham (@ArkhamIntel) July 5, 2024

Ethereum, the second-largest digital asset by market cap, has not been spared from the downturn. Its price fell over 4%, dropping below $3,000 for the first time since May 17. This decline reflects the broader impact of market uncertainty on various digital assets.

Meanwhile, the crypto market struggles are part of the broader economic concerns, particularly around the U.S. Federal Reserve’s ability to manage inflation. These concerns have lowered investors’ confidence, contributing to the ongoing market depression.

As the Fed works to control inflation, volatile assets like cryptocurrencies are feeling the pressure. This economic backdrop has led experts to predict that Bitcoin could record further declines, potentially sliding to $52,000.

Bitcoin Miners Face Rising Hashrate as Revenue Drops

In addition to the price dip, Bitcoin’s daily mining revenue has also fallen to an all-time low, creating severe challenges for miners.

Luxor’s hashrate index revealed that the earnings per petahash per second have plunged to just $44.8. This dramatic decline has raised concerns, particularly among smaller mining operations.

Despite the drop in revenue, the overall computational power used in Bitcoin mining has been increasing. The seven-day simple moving average for Bitcoin’s hashrate has grown from 556 exahash per second to 578 EH/s.

This increase in hashrate shows that more computational resources are being directed toward Bitcoin mining, even as the financial rewards diminish.

The decline in revenue per petahash is particularly detrimental to smaller mining operations. These miners often operate with thinner margins and less financial cushion, making it harder for them to stay profitable when earnings drop.

On the other hand, the increased hashrate worsens their difficulties, as they must compete with more extensive operations that can sustain lower profits over a more extended period.

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