Bitcoin (BTC) fell as low as $42,296, while Ethereum (ETH) fell below $4,000. Cryptocurrency experts share their opinions about this hard selling wave.
Bitcoin dropped as low as $42,296 before recouping some of the dips. In the last 24 hours, it is down about 15.8 percent. Leading altcoin Ethereum, on the other hand, slumped as much as 17.4 percent before reducing the pullback to around 10 percent. According to the data, the overall crypto industry has slumped to $2.2 trillion, losing about one-fifth of its value.
Fluctuations in cryptocurrencies come in the midst of a volatile period for financial markets, according to experts. Rising inflation is forcing central banks to tighten monetary policy, threatening to dampen the liquidity headwind that has lifted a broad spectrum of assets. The omicron variant of the coronavirus has also led to risk aversion amid concerns that the global economy may shut down again. Shelter assets such as U.S. Treasuries rallied as global equities fell more than 4 percent from their record low in November.
(Bitcoin to USD Chart)
(Ethereum to USD Chart)
According to Vijay Ayyar, head of Asia Pacific with Singapore crypto exchange Luno, some leveraged buyers of Bitcoin were flushed out in Saturday's crash.
“The market is tense due to the emergence of cases in many countries, all the uncertainty about the omicron variant. Uncertainty arises as it is difficult to say what these developments mean for economies and markets.”
Nearly $2.4 billion of positions, both long and short, were liquidated Saturday, according to the data. This amount marks the largest liquidation seen since September 7. BTC has lost nearly $21,000 since it broke the record on November 10. Yet this year it still offered a return of more than 60 percent, surpassing the rise of many other assets. El Salvador's President, Nayib Bukele, said that the country bought it from the drop by adding 150 coins to its portfolio.
Antoni Trenchev, co-founder of crypto credit institution Nexo, used the following statements:
“As usual, as crypto traders use leverage, this has resulted in staggered sell orders and liquidations. We should find support between $40,000 and $42,000 and then recover in line with the year-end rally. If that doesn't happen, we could revisit the July lows of $30,000 to $35,000. "