A cry of grief! Bitcoin plummeted by nearly $4,000 in a short period of time. Is the "crypto winter" coming?

During the Asian session on Monday, many digital currencies were sold off again, with Bitcoin falling below the $5.4 mark at one point, and long positions worth nearly $400 million being liquidated in just one hour.

Bitcoin is under pressure from a bout of risk aversion in global markets, which has saddled the largest digital asset with its biggest weekly loss since the 2022 FTX exchange debacle.

Bitcoin fell 13.1% in the seven days ending last Sunday, the biggest drop since FTX went bankrupt. On Monday, Bitcoin fell below $68,000 in a short period of time, and Ethereum and other altcoins also fell sharply.

U.S. stock futures fell early Monday, reflecting concerns about the growth outlook for the world's largest economy and weakness in large technology stocks amid questions about whether artificial intelligence hype has gone too far. Geopolitical tensions in the Middle East are intensifying, exacerbating investor unease. Bitcoin briefly lost the $54,000 mark, falling nearly $4,000 from its intraday high, and Ethereum once approached the $2,000 mark. According to Coinglass data, in the last hour, the amount of long orders liquidated was as high as $333 million.

On August 2, the U.S. spot Bitcoin ETF suffered its largest outflow in about three months , and Bitcoin also fell below its 200-day moving average price. Tony Sycamore, a market analyst at IG Australia Pty, wrote in a report that this technical chart pattern "opens the way for a further pullback."

Since hitting a record high of $73,798 in March, Bitcoin has been hit by a host of factors, including the changing fortunes of U.S. politics as pro-crypto Republican presidential candidate Donald Trump and his Democratic rival, Vice President Harris, who has yet to detail her policy stance on digital assets, battle it out in the presidential race.

Also hanging over the market are the risks that bitcoin seized by governments could be sold and that Mt. Gox could create a supply glut by returning tokens to creditors through bankruptcy proceedings.

U.S. bond traders have increased bets that the United States will cut interest rates starting in September to support economic expansion. Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, believes that the recent turmoil in traditional markets "increases the likelihood that monetary policy will be introduced sooner rather than later, which is a good thing for cryptocurrencies."

Bitcoin's gains for the year to date have slowed to about 34%, while gold has risen 19% and global stocks have risen 9%.