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Bitcoin and ether prices drop sharply. What will happen to the price of Bitcoin now? Bitcoin’s Correlation With Stocks Grows as Risk Appetite Drops

Bitcoin Drops $9K in an Hour on Spot Market Selling; El Salvador Again Buys The Dip

The cryptocurrency is currently trading around $47,960.
The price of bitcoin plummeted early Saturday, falling nearly $10,000 in roughly an hour to a temporary low of $42,000 before bouncing up to $45,000.

Bitcoin has fallen some $15,000 over the past 24 hours. Ether, the second largest cryptocurrency by market capitalization, fell around $1,100 over the same time period.

The leading cryptocurrency reflected a broader drop in crypto markets, according to CoinDesk’s price index, with some cryptocurrencies falling more than 20% over the past 24 hours. Most of these assets appear to have suffered a sharp decline starting around 04:00 UTC Saturday.

According to CoinGecko, the overall market cap is currently hovering around $2 trillion.
Spot market selling seems to have driven the cryptocurrency lower before triggering huge stop loss in the derivative markets.

“So far I’ve seen upwards of 4000 BTC being sold that pushed the market abruptly down,” Laurent Kssis, a crypto exchange-traded fund expert and director of CEC Capital. “In fact, 1,500 BTC alone was sold in less than a minute at the time of the drop.”

Data tracked by Coinglass shows the price drop has triggered nearly $600 million worth of bitcoin futures positions in less than an hour. The market appeared over leveraged earlier this week with open interest (OI) elevated in bitcoin terms.

“The bitcoin denominated OI has now remained above 365,000 BTC for more than a month. It is not common to see such a high OI being sustained for such a long duration. This could suggest that the market is currently over- saturated with leverage,” Arcane Research’s weekly note published Tuesday said.

Tether (USDT), the world’s largest stablecoin by market value, saw a brief spike to $1.025 on the Nasdaq-listed Coinbase exchange, moving away from its usual 1:1 peg.

 

Bitcoin Prices Fell To Almost 2-Month Low

What Should Traders Expect Next?

Bitcoin prices suffered significant declines today, falling to their lowest in nearly two months and repeatedly dropping below $53,000, a level that has been identified as providing key support.

The world’s most valuable digital currency by market value reached as little as $51,808.54 this afternoon, CoinDesk data shows.

At this point, it was trading at its lowest level since October 6, additional CoinDesk figures reveal.

Following this decline, the cryptocurrency bounced back, rising above $54,000, before continually falling below $53,000 this evening.

 

 

Bitcoin and ether prices drop sharply, falling more than 10%

Bitcoin prices dropped sharply in the early morning hours ET Saturday, plunging more than 10% to a low near $43,000.

The world’s most prominent cryptocurrency pared losses subsequently, changing hands at around $47,133. Still, bitcoin has dropped more than 16% in the past 24 hours, according to Coindesk.

The price of ether also dived, dropping more than 10% to a low near $3,500. It came back somewhat afterward, trading near $3,870.

Ether, the world’s second-largest digital coin by market value, has lost more than 14% over the past 24 hours, according to Coindesk.

Both cryptocurrencies have experienced turbulent trade since the omicron Covid variant emerged, tracking global stock markets which have been also volatile. On Nov. 26, bitcoin hit a seven-week low close to $54,000, officially entering bear market territory.

Bitcoin is now down about 30% from an all-time high close to $69,000, which it hit in early November. Bear markets are typically defined as a decline of 20% or more from recent highs.
Major averages on Wall Street also posted a losing week as as the market wrapped up a roller-coaster week driven by Covid omicron variant concerns.

The World Health Organization on Friday said the Covid omicron variant has been detected in 38 countries, up from 23 two days ago, with early data suggesting the strain is more contagious than delta.

 

Bitcoin Plunges Over 20% in Another Sign of Global Market Nerves

Leveraged Positions

Some leveraged buyers of Bitcoin were flushed out in Saturday’s crash, according to Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore.

“Markets have also been jittery with all the uncertainty around omicron, with cases now appearing in many countries,” he said. “It’s hard to say what that means for economies and markets and hence the uncertainty.”

About $2.4 billion of crypto exposure, both long and short, was liquidated on Saturday, the most since Sept. 7, according to data from Coinglass.com.

Bitcoin, famed for its volatility, has shed about $21,000 since hitting a record on Nov. 10.

But it’s still up more than 60% this year, a return that exceeds many other assets — and El Salvador’s President Nayib Bukele said the country had again bought the dip, adding 150 coins. The nation this year adopted Bitcoin as legal tender.

“As usual, since crypto traders deploy leverage it results in cascading sell orders and liquidations,” said Antoni Trenchev, co-founder of crypto lender Nexo. “We should find support around $40,000 to $42,000 and then rebound in line for a end-year rally. If that does not hold, we might revisit the July lows of $30,000 to $35,000.”

 

“As usual, since crypto traders deploy leverage it results in cascading sell orders and liquidations,” Antoni Trenchev, Co-founder of crypto lender Nexo, told Bloomberg. “We should find support around USD 40,000 to USD 42,000 and then rebound in line for a end-year rally. If that does not hold, we might revisit the July lows of USD 30,000 to USD 35,000.”

Meanwhile, according to Vijay Ayyar, head of Asia Pacific with crypto exchange Luno, markets have also been jittery with all the uncertainty around the omicron variant of the coronavirus.

“It’s hard to say what that means for economies and markets and hence the uncertainty,” he was quoted as saying.

At the same, El Salvador’s President Nayib Bukele said the country had again bought the dip, adding BTC 150.

 

 

Bitcoin’s Correlation With Stocks Grows as Risk Appetite Drops

“The crypto industry looks at Bitcoin as like this super-low-risk option. And it looks at some of the other coins as the higher risk option. But take a step back, and the rest of us look at Bitcoin as a high-risk option in the broader investment landscape,” said Liz Young, head of investment strategy at SoFi. “So it’s all about your perspective and your comfort level.”

Bitcoin’s having a rough week and is on pace to post its fourth straight day lower. Many traders have turned to technical indicators for suggestions on its next potential move. Right now, Bitcoin is testing its average price over the last 100 days, while Ether, the second-largest digital asset, is testing its 50-day moving average. Breaking below those key levels could mean more pain ahead for investors.
Still, despite some recent rough patches, Bitcoin is still up about 100% for the year. And crypto bulls remain emboldened, putting out predictions that Bitcoin — and other coins — could still rally strongly into year-end.

Messari CEO and co-founder Ryan Selkis is out with a new report about what he expects for 2022 — in it, he writes that there are certain fundamental analyses traders could follow to get a read on Bitcoin’s next possible moves. One is something called the market-value to realized-value metric (or MVRV), which represents the ratio of free-float Bitcoin market cap to the realized value, which sums the market value of each coin according to the time it last moved on the blockchain. The gauge shows that the market cap can stay the same while the realized metric spikes — and vice versa.

 

 

What will happen to the price of Bitcoin now?

It’s been a few days since Bitcoin it continued to be traded in a rather narrow price range between a low of $ 56,000 and a high of $ 59,000 on Thursday.

The lateralization of the price of Bitcoin

This lateral trend is considered by experts as a classic pause by investors after the great bull run that had led Bitcoin to reach its all-time highs of over $ 67,000.
Some analysts worry that increasing leverage in the Bitcoin futures market may precede a short-term drop in prices, while others expect the current trading range to translate into a further upside.

According to the consensus of most analysts, a range between a support around $ 55,000 and one resistence around $ 59,000.

These two price levels seem to be holding so far, and it is difficult to understand which of the two levels will prove stronger.

 

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