[Sidecar Triggered Due to Stock Market Plunge] 'Black Monday' Replay, Nikkei Index Records Biggest Ever Drop

Hello, this is SEPOWER!

It's a historic day that will be remembered as a record-breaking decline, not only in the cryptocurrency market but also in the stock market.

Bitcoin continues to hit new lows with its continuous decline. It's plummeting due to consecutive panic selling. It has continuously fallen without any rebound, from its peak of 70K to 49K.

The reasons for this decline include employment indicators raising concerns about an economic recession. The Fed's decision to keep interest rates on hold has been met with a negative response from the market, leading to concerns about a potential recession.

Let's discuss whether the current market is truly healthy and whether it's still advisable to continue investing by considering various perspectives.

Plummeting Virtual Asset Market...Major Exchanges also Face 'Dark Clouds' in Earnings Due to Decreasing User Numbers

Amidst concerns about a US recession and escalating tensions in the Middle East, Bitcoin's price has plunged, breaking below the $60,000 mark and even losing the $55,000 level. Meanwhile, the number of users of virtual asset exchanges has also decreased last month.

Since Bitcoin peaked after exceeding 100 million won in March, the number of users has also decreased alongside the declining Bitcoin price. As the number of virtual asset exchange users continues to decrease, it is predicted that earnings will be sluggish not only in the second quarter but also in the third quarter.

Where is the Bottom...Bitcoin Falls Below $60,000
As of 1 PM on the 5th, based on Upbit, a virtual asset exchange, the price of Bitcoin was traded in the 76 million won range. This represents a sharp drop of nearly 20 million won compared to the same time last week. In particular, it has plummeted by over 15 million won since last weekend. The price of Bitcoin appears to have fallen due to various factors, including concerns about a US economic recession, concerns about the spread of the Middle East war, and the Bank of Japan's interest rate hike.

On the 31st of last month, the Bank of Japan raised its interest rate from 0.1% to 0.15-0.25%. Also, on the 1st (local time), the Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) announced in its official statement that it would maintain the benchmark interest rate. The US benchmark interest rate remained at 5.25-5.50%.

Furthermore, the US manufacturing PMI for July fell to 46.8, the lowest level in eight months, while the unemployment rate rose to 4.3%, exceeding market expectations (4.1%). According to the US Department of Labor, nonfarm payroll employment increased by 114,000 in July. This was significantly lower than market expectations (176,000).

In addition, concerns about the expansion of the Middle East war are growing as Iran has stated that it is willing to resort to war. Iran previously received requests from Arab countries to refrain from retaliatory attacks against Israel. However, it is reported that Iran rejected these requests, stating that it does not mind if a war breaks out. In response, Israel has reportedly begun considering preemptive strikes against Iran.

With various negative factors piling up, the KOSPI and virtual assets have both experienced a sharp decline. The KOSPI index fell by over 193 points at one point during the session on the 5th, setting a record for the largest decline.

(Source: Dontaku's blog https://blog.naver.com/dontakoo/223536977235)

I wanted to share this excellent article with you all because it's worth pondering.

Until now, stocks, particularly US stocks, have seen significant gains, contributing to a positive consumer sentiment.

The feeling of being wealthy due to the rising stock prices led to increased spending.

But now, it's all been shattered.

The pillar that sustained consumer sentiment has collapsed.

The reason US stocks were strong was that people from all over the world were buying them... However, the stock market decline could accelerate a global consumption slump.

Paradoxically, it's not necessarily that the stock market is crashing because of an economic recession

But rather, the stock market crash could accelerate a global economic recession.

Stock market crash > Feeling broke > Reduced spending > Accelerated economic recession > Late confirmation of economic recession

Perhaps the advice from the older generation to avoid stocks and investment stemmed from similar experiences.

I believe in Bitcoin's cycle, but just as it formed a double top and declined due to economic factors in the previous bull market, being an asset, it's inevitable that it will be influenced by economic conditions.

Therefore, I believe it could decline anytime and the bull market may not come or could end prematurely.

However, it's too early to conclude with this. As a commodity asset, Bitcoin has received substantial institutional investment, benefiting from the liquidity provided by interest rate cuts. Therefore, I believe there are plenty of factors that could drive its rise.

When making investment decisions, I need to consider various perspectives, including the viewpoint presented by Dontaku, before making a final decision.

The cryptocurrency market is highly volatile and risky. However, if we believe in the halving cycle, it's clear that it hasn't ended yet.

If it declines, I plan to prioritize holding Bitcoin over altcoins.

I'd love to hear your perspectives and share diverse viewpoints!

Here's a comparison image with the decline during the COVID-19 period.

Although the current decline hasn't reached the same level as then, the prolonged bear market for altcoins has significantly heightened the sense of fear in the market.

However, Bitcoin's fundamentals remain unchanged, and it's highly likely that the current situation is caused by external noise. Considering the previous bubble formation, it could also be a process of market normalization.

I believe it's too early to declare the end of the season.

Thank you for visiting today!