Bitcoin Price Tumbles After Wall Street Selloff : Cryptocurrency Bitcoin price

Bitcoin Price Tumbles After Wall Street Selloff Cryptocurrency Bitcoin price

New Delhi: The pre-Christmas sell-off in the cryptocurrency markets spooked the investors, dampening the risk appetite. The virtual currency market became the latest to fall victim to the selling pressure, as investors risk off their positions.

Major cryptocurrencies, including the behemoths like Bitcoin and Ethereum, lost up to a fifth of their value on the back of profit booking and concerns triggered nearly a billion dollars worth of selling across cryptocurrencies.

The sudden sell-off in bitcoin and other cryptos comes on the heels of some serious stock market declines, in the US, said Raj A Kapoor, Founder, India Blockchain Alliance.

Bitcoin loses $10,000, or 17%, in 24 hours

 after overnight rout

  • Bitcoin prices dropped sharply Saturday early morning hours ET, plunging to a low near $43,000 before rebounding some.
  • The crypto lost about $10,000, or more than 17%, in a 24-hour period from Friday to Saturday.
  • The price of ether dived as well, falling as low as $3,500 on Saturday.
  • Bitcoin was at around $57,000 Friday morning before it began falling as stocks sold off on Wall Street.
  • Crypto began falling Friday as stocks pulled back and investors fled to the safety of Treasuries, pushing the 10-year yield lower. Risky tech stocks were among the biggest losers on Wall Street on Friday, with Tesla shedding 6%. The ARK Innovation fund lost 5% on Friday and 12% on the week.

    As the sentiment soured in the tech space, those investors may have also started unloading their crypto.

    But there was no clear reason for the cryptocurrency drop, especially overnight Saturday when the losses accelerated.

    "The evidence points to this being yet another derivative-induced selling event," wrote J.C. Parets, chief market strategist for All Star Charts technical research, in a note Saturday morning. "The September flash crash had the same drivers as this selloff — leverage was flushed from the system in a violent fashion, which later enabled the market to eventually move higher toward a new all-time high in October."

    Will Clemente, insights analyst at Blockware Solutions, agreed that the sell-off was derivatives-based and added that open interest has been at all-time highs for more than a month while funding rates have been positive. He also said it could be the set-up for another bull run like the one that kicked off this year.

    "There's a reasonable case that we could see the opposite effect heading into Q1, as funds are willing to take on more risk for the new year with fresh profit and loss," he said. "This effect assisted in bitcoin's massive move in January 2021."

    He added that, network dynamics are still "healthy and show supply continues to move to long term investors."

Post a Comment

0 Comments