Virtual Assets Also Face 'Black Monday'... Returning to February Levels [Bitcoin Now]

Simultaneous Decline in Stock and Virtual Asset Markets
Risk Aversion Intensifies
Intraday Low Reaches $53,000 Range

On the 5th, the virtual asset market, along with the stock market, faced a 'Black Monday.' Bitcoin prices plummeted due to risk-asset aversion sentiment, dropping intraday to the mid-$53,000 range. This returned the price to levels seen at the end of February, giving back gains made over the past five months.

Bitcoin has weakly collapsed due to fears of a U.S. economic recession, plummeting more than 18% in a week and maintaining fluctuations around 77 million won. On the 5th, cryptocurrency prices including Bitcoin were displayed at the Upbit Lounge in Gangnam-gu, Seoul. Photo by Jo Yongjun jun21@

According to the global virtual asset market tracking site CoinMarketCap, as of 10:58 AM KST on the 5th, Bitcoin was trading at $54,661.69, down 9.88% from the previous day. Compared to a week ago, it fell 20.29%, and compared to a month ago, it dropped 4.39%. The year-over-year increase rate has decreased to 88.26%.

The price, which started at the $68,000 range on the 29th of last month, turned downward the following day and continued to decline until this day. The psychological support level of $60,000 was broken the previous afternoon. Around 10 AM on this day, the price even wavered down to the low $53,700 range. This is similar to the level seen at the end of February.

[Image source=Yonhap News]

The weakness in Bitcoin prices is attributed to risk-asset aversion sentiment amid concerns over a U.S. economic slowdown. This is interpreted as a result of the disappointing figures in the U.S. Labor Department's July employment report released on the 2nd (local time). The U.S. Labor Department announced that nonfarm payrolls increased by 114,000 last month, significantly below market expectations of 185,000. The unemployment rate was reported at 4.3%, also higher than the market expectation of 4.1%. This unemployment rate was the highest since October 2021.

The stock market also showed pronounced risk-asset aversion sentiment. As of 11:05 AM on this day, the KOSPI index was at 2,549.50, down 4.73% from the previous close. The index started lower and, unable to withstand foreign selling pressure during the session, fell below the 2,600 level.

According to the virtual asset data provider Alternative, the Fear & Greed Index, which measures investor sentiment, was at 26 points (Fear) on this day. This is significantly lower than last week's 74 points (Greed). Alternative's Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating optimism.