According to QCP Group, one of Singapore’s first digital asset trading groups, the current cryptocurrency market crash is directly related to the sell-off at Jump Trading.
According to Cointelegraph data, the price of Ether (ETH) fell more than 21% in the 24 hours to 11:20 a.m. UTC, trading at $2,252.
According to an August 5 report from QCP Group, the plunge to a five-month low was primarily due to Ether sell-offs by Jump Trading and Paradigm VC.
“The immediate trigger for crypto appears to have been the aggressive ETH sell-off by Jump Trading and Paradigm VC. This move was probably exacerbated by market makers trying to shorten their gamma as front-end ETH volumes surged from over 30% to over 120%!”
The price of Ethereum is struggling to stay above the psychological level of $2,200, and any dip below this could trigger further panic selling among cryptocurrency investors, sending the lowest price ever lower.
The first Ethereum exchange-traded fund (ETF) to be launched in the United States has seen a sharp decline despite its debut on July 23.
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Jump Trading continues to sell Ether.
According to a report by Cointelegraph, Jump Crypto, the cryptocurrency division of Jump Trading, moved hundreds of millions of dollars worth of digital assets to a cryptocurrency exchange last week in preparation for a massive selloff.
Jump Trading has sold $377 million worth of Wrapped Lido Staked ETH (wstETH) since July 24th, when the price of Ethereum began to decline.
According to a post by Lookonchain on August 5, the company plans to sell a total of $481 million worth of wstETH.
“Jump Trading has sold 120,695 wstETH ($481 million) and has sold $83,000 wstETH ($377 million) since July 24th, leaving $37,604 wstETH ($104 million) left. The market has also started to decline since July 24th, down over 33%!”
Jump Trading is reportedly under investigation by the U.S. Commodity Futures Trading Commission (CFTC). The company’s president, Kanav Kariya, resigned on June 24.
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Macroeconomics played a major role in the cryptocurrency market crash.
Macroeconomic factors also played a significant role in the cryptocurrency market downturn.
Friday’s U.S. unemployment data was a significant negative catalyst, according to a QCP report.
“Plus, volatility has spiked across all assets as massive unwinds occur. VIX hits 50 (only higher during the Corona panic and the 2008 financial crisis) and USDJPY 1M at-the-money Vols have spiked by 16%! This is very likely to result in further unwinds.”
Moreover, according to QCP, the current military tensions between Israel and Iran could put further downward pressure on global markets.
“The Israeli killing of the Hamas leader over the weekend also created a climate of global risk aversion. Iran vowed to take action, and the United States has actually begun deploying troops to the Middle East.”
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