Bitcoin Falls Below $50,000: Cryptocurrency Market Crashes 17%

Bitcoin price fell below $50,000 for the first time since February, hitting a low of $49,351 before rebounding towards the $51,000 mark.

As BTC dominance hits 58% amid altcoin and stock market crash, over 17% of the total cryptocurrency market cap has been wiped out.

According to CoinMarketCap, the total market capitalization of the cryptocurrency market was around $2.16 trillion, but fell to a low of around $1.76 trillion on August 5.

Related: Bitcoin Dominance Hits 58% Amid Bloodbath on Altcoins, Stock Markets

Over $600 Million in Leveraged Positions Liquidated

In the early hours of August 5, the start of the Bitcoin (BTC) price decline led to the destruction of $600 million in leveraged long positions taken by traders.

This stock market crash also saw Ether (ETH) collapse, losing nearly 20% of its value in just two hours.

At the time of writing, the price of ETH was around $2,200 after recovering from a low of $2,172 at 07:25 UTC on August 5.

Related: Bitcoin Crashes Below $53,000, Wiping Out $600 Million in Leveraged Long Positions

Largest three-day cryptocurrency destruction in a year

Since August 2, the market has recorded its biggest three-day decline in nearly a year, losing more than $500 billion while the performance of S&P 500 stocks has fallen more than 4% over the same period.

With recession fears rising, poor US jobs data and sluggish growth in major technology stocks, the market meltdown may only be beginning.

Unlike the week of July 29, when the Crypto Fear & Greed Index recorded a value of 67 – categorized as “Greed” – the current value of 26 is deep into “Fear” territory.

Related: $500 billion drop: Biggest three-day drop for cryptocurrencies in a year

Bitcoin Layer 2 Sustainability Issues

On August 2, Galaxy Research published a report suggesting that most Layer 2 Bitcoin scaling networks may not be sustainable in the long term.

Despite the popularity of Bitcoin L2 networks, Galaxy analyst Gabe Parker pointed out that the associated costs, particularly rollups, could pose challenges in the future.

Parker explained that Bitcoin rollups must generate enough revenue from transaction fees on their networks from users willing to pay L2 network fees to survive and excel in the future.

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