A rapid decline in the traditional markets has spread to cryptocurrencies, obliterating them with a significant drop in all major assets. What are the possible factors for this perfect storm?
On Aug. 2, $2.9 trillion vanished from the stock markets, resulting in the worst day of trading since the COVID-19 crash in 2020. Mounting recession fears and other factors have also plunged the crypto markets, flooding the sentiment with fear.
Bitcoin (BTC) has dropped by 27%, Ether (ETH) by 34%, and more than $1.13 billion in futures positions have been liquidated. The last-day market action has dramatically changed the Fear & Greed Index from greed (74) to fear (26), very close to extreme fear.
The CBOE Volatility Index (VIX), which measures stock market volatility based on S&P 500 index options, reached 65, the highest level since the pandemic crash. This indicates that markets could enter an extreme turbulence phase. The reasons for this downfall are not crypto-specific but clearly affect Bitcoin and especially the altcoin market.
