Bitcoin price drops below $30k as crypto market turns sea of red

Souvenir tokens representing cryptocurrencies Bitcoin, Ethereum, Dogecoin and Ripple plunge into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/Illustration
Bitcoin price plunges: Souvenir tokens representing cryptocurrencies Bitcoin, Ethereum, Dogecoin and Ripple. Reuters/Dado Ruvic/Illustration

Bitcoin has fallen below $30,000 after yesterday's positive trend that saw the world's preeminent cryptocurrency surge to almost $32,000.

The cryptocurrency market turned a sea of red on Tuesday after a brief rally on Monday that sent bitcoin over the $31,000 level for the first time in six days.

The combined market cap of all cryptocurrency assets has dropped by $90 billion in the last 24 hours to just over $1.2 trillion.

Read more: Crypto live prices

Bitcoin (BTC-USD) is now trading at around $29,500, down 5% in one day.

Ethereum (ETH-USD), the second largest cryptocurrency by market cap, was down almost 7% in the last 24 hours, to trade at a low of $1,761, as of the time of writing.

The current volatility saw well over $200 million in long positions liquidated across the entire cryptocurrency market.

In the past 24 hours over 74,592 cryptocurrency traders were liquidated, with the total liquidations coming in at $218.63 million, as of the time of writing.

According to data from Coinglass, the largest single wipe-out over the last 24 hours happened on the Okex cryptocurrency derivatives exchange, where a $2.3m ETH-USDT swap was liquidated.

However, amid the bearish collapse of all blue-chip cryptocurrencies, Cardano managed to stay in the green, with a modest rise of 2.4% in the last 24 hours. Cardano (ADA-USD) is now trading at $0.58.

Cryptocurrency analysts are still seeing signals that the market is feeling for a bottom before springing upwards to new highs.

Read more: Crypto: Stablecoin storm spreads after billions of tether is cashed out

Analysts point to the recent institutional investor interest in bitcoin exchange-traded products, ETFs, as a sign of long term strength in the market.

Speaking to Reuters chief investment officer of Arizona-based IDX Digital Assets Ben McMillan said: "It's largely institutional, and to a degree retail investors, recognising that the pain is already endured, and we're closer to the bottom than we are to the top.

"If you're getting into crypto at these levels, a little near-term volatility could be worth a long-term payoff.

Read more: Why is cardano surging past solana?

"A lot of institutional investors are starting to look at crypto as a source of longer-term growth potential."

According to data from bitcoin ETF fund providers institutional investors are returning to crypto by utilising the security and greater liquidity of exchange-traded products.

According to Kraken intelligence, the assets under the management of several bitcoin-futures ETFs have risen in the past week.

The assets of the ProShares Bitcoin Strategy ETFs have grown 6%, while those of the Global X Blockchain & Bitcoin Strategy ETF (BITS.O) and VanEck Bitcoin Strategy ETF has climbed over 3%.

Major institutional players are still pouring money into the crypto industry.

For instance, in late May Silicon Valley venture capital firm Andreessen Horowitz pledged $600M to back the development of metaverse gaming projects.

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