Bitcoin Price Down by a Fifth as Crypto Market Crash Sees $1 Billion Worth Liquidated

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Bit­coin shed a fifth of its val­ue on Sat­ur­day as a com­bi­na­tion of prof­it-tak­ing and macro-eco­nom­ic con­cerns trig­gered near­ly a bil­lion dol­lars worth of sell­ing across cryptocurrencies.

Bit­coin was 12 per­cent down at 9:20 GMT at $47,495 (rough­ly Rs. 35.76 lakhs). It fell as low as $41,967.5 (rough­ly Rs. 31.60 lakhs) dur­ing the ses­sion, tak­ing total loss­es for the day to 22 percent.

The broad sell­off in cryp­tocur­ren­cies also saw ether, the coin linked to the Ethereum blockchain net­work, plunge more than 10 percent.

Based on cryp­tocur­ren­cy data plat­form Coingecko, the mar­ket cap­i­tal­i­sa­tion of the 11,392 coins it tracks dropped near­ly 15 per­cent to $2.34 tril­lion. That val­ue had briefly crossed $3 tril­lion last month, when bit­coin hit a record $69,000 (rough­ly Rs. 51.96 lakhs).

The plunge fol­lows a volatile week for finan­cial mar­kets. Glob­al equi­ties and bench­mark US bond yields tum­bled on Fri­day after data showed US job growth slowed in Novem­ber and the Omi­cron vari­ant of the coro­n­avirus kept investors on edge.

Justin d’Anethan, Hong Kong-based head of exchange sales at cryp­tocur­ren­cy exchange EQONEX, said he had been watch­ing the increase in lever­age ratios across the cryp­tocur­ren­cy mar­kets as well how large hold­ers had been mov­ing their coins from wal­lets to exchanges. The lat­ter is usu­al­ly a sign of intent to sell.

“Whales in the cryp­to space seem to have trans­ferred coins to trad­ing venue, tak­en advan­tage of a bull­ish bias and lever­age from retail traders, to then push prices down,” he said.

The sell­off also comes ahead of tes­ti­mo­ny by exec­u­tives from eight major cryp­tocur­ren­cy firms, includ­ing Coin­base Glob­al CFO Ale­sia Haas and FTX Trad­ing CEO Sam Bankman-Fried, before the US House Finan­cial Ser­vices Com­mit­tee on Decem­ber 8.

The hear­ing marks the first time major play­ers in the cryp­to mar­kets will tes­ti­fy before US law­mak­ers, as pol­i­cy­mak­ers grap­ple with the impli­ca­tions of cryp­tocur­ren­cies and how to best reg­u­late them.

Last week, the US Secu­ri­ties and Exchange Com­mis­sion (SEC) reject­ed a sec­ond spot-bit­coin exchange-trad­ed fund pro­pos­al from WisdomTree.

Data from anoth­er plat­form Coin­glass showed near­ly $1 bil­lion worth of cryp­tocur­ren­cies had been liq­ui­dat­ed over the past 24 hours, with the bulk being on dig­i­tal exchange Bitfinex.

“If any­thing, this is the oppor­tu­ni­ty to buy the dip for many investors who might have pre­vi­ous­ly felt like they missed the boat. We can see teth­er bought at a pre­mi­um, sug­gest­ing peo­ple are get­ting cash ready, with­in the cryp­to space, to do just that,” D’Anethan said, refer­ring to the biggest sta­ble­coin in the cryp­tocur­ren­cy world.

A plunge in bit­coin fund­ing rates — the cost of hold­ing bit­coin via per­pet­u­al futures which peaked at 0.06 per­cent in Octo­ber — also showed traders had turned bearish.

The fund­ing rate on cryp­tocur­ren­cy trad­ing plat­form Bit­MEX fell to a neg­a­tive 0.18% from lev­els of 0.01 per­cent for most of November.


Inter­est­ed in cryp­tocur­ren­cy? We dis­cuss all things cryp­to with WazirX CEO Nis­chal Shet­ty and Week­end­In­vest­ing founder Alok Jain on Orbital, the Gad­gets 360 pod­cast. Orbital is avail­able on Apple Pod­casts, Google Pod­casts, Spo­ti­fy, Ama­zon Music and wher­ev­er you get your podcasts.

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