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Marketcap: $ 1,741,181,196,544(1.47%)
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New York
Sunday, January 23, 2022

Bitcoin (BTC): The current market sees red following falling to $ 42,000

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Saturday saw nearly $ 2 billion in liquidations as the market fell to its lowest level in two months. Bitcoin had one of its worst trading days on Saturday morning as the price continued its downtrend. The price had managed to stay above $ 50,000 on Friday. However, on Saturday morning a massive sell-off was triggered, leading to a cascade of liquidations at the same time.

Bitcoin at its lowest for two months
Bitcoin selling continued at an accelerated pace on Saturday morning as the price fell massively to $ 42,000 on Binance. The price of bitcoin corrected around 40% from all-time highs before seeing a slight rally to around $ 48,000 at the time of writing.

Altcoins follow bitcoin’s decline
The price saw bitcoin drop to its lowest level in two months, which ultimately sparked a sell-off on most market-wide altcoins. Like bitcoin, major caps such as Ethereum and Binance Coin have both experienced similar declines. The entire top 10, excluding stablecoins, posted losses of up to 20%.

Massive liquidations as the market collapses
Recent price activity has not gone well for traders. In the past twelve hours, the market has seen more than $ 1.8 billion in liquidations. More alarming is that $ 1.56 billion has been received in the past four hours.

According to Coinglass, more than 80% of the liquidations were in long positions. With bitcoin claiming well over 60% of those liquidations.

Ether recorded over $ 388 million in liquidations while Cardano (ADA) was the second largest altcoin with over $ 50 million in liquidations.

Binance and Okex accounted for around 53% of all liquidations on the exchanges. As the market slowly recovered, Binance CEO Changpeng Zhao had little to say, but tweeted “We’re still here, building.” While FTX exchange CEO Sam Bankman-Fried added, “Yes, I picked a bad day to steal. “

Possible reasons for market dumping
The market dumping ground came as an unexpected moment for market activity. The Saturday morning price drop seems to have taken many traders by surprise.

The recent announcement of the latest strain of Covid-19 appears to be an underlying factor in the recent bearish market sentiment. However, after a week of detecting the Omicron virus, this price action appears to have been driven by something else. Crypto Trader’s CNBC host Ran Neu-Ner added his perspective on the possible reasons for the dumping. The host added several possibilities on Twitter, including “Too much leverage for too long. Evergrande still a potential flaw! Stock market nervous about Omicron and the Fed stepping up tapering. Biden has a cold. “, did he declare.

Total market capitalization still up 250% in 2021
It should be noted that even though bitcoin has declined almost 30% from its all-time high almost a month ago, the overall market cap is still up 250% since early 2021. With bitcoin in increase of more than 150% since January. While corrections are expected, the likelihood of a prolonged uptrend may have resulted in complacency in market sentiment, leading to overstretched long positions.

As the market appeared to recover, investors helplessly witness the mass sell-off that follows bitcoin’s (BTC) drop to $ 42,000. Several reasons are put forward regarding the origin of this dumping: the announcement of the latest variant of Covid-19, too much leverage on long positions, the latest Fed policies, etc. At the same time, the overall market capitalization offers an unprecedented rise just like that of bitcoin. Can we expect a market correction?

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