by Robert Zach and Daniel Shvartsman
Investing.com – Bitcoin plunged in early morning Saturday trading, taking the torch from a risk-off week in the markets at large, though it recovered later in the day. At 2:25pm ET, the leading cryptocurrency was trading just over $49,200, down over 8% in the last 24 hours, but recovering from the biggest drop in crypto since September 7th.
The broader crypto complex has seen similar plunges and then paring of losses, including, Ethereum, Solana, Cardano and Ripple XRP plunge double digit percentages. Dogecoin and Shiba Inu, two leading meme tokens, have been caught up in the volatile trading as well.
This follows on Friday’s stock market action, where the S&P sold off .8% and the Nasdaq sold off nearly 2%, driven a miss on the jobs report as well as Docusign’s 42% plunge and the implications for the software sector. The week was marked by fears over the Omicron variant of Covid 19 – though the variant’s severity remains unclear, and it may be ultimately a positive development – as well as Fed chair Jerome Powell’s ‘retirement’ of the term transitory inflation, signaling that tapering plans and perhaps rate hikes will be coming in the near future, leading the market to a risk-off environment.
Bitcoin closed the market trading week down a little over 5%, but the move accelerated over Friday-Saturday overnight trading. The selling was its most marked around midnight Eastern time, where bitcoin crashed from $52,000 to a low of $42587.8, per the Investing.com index of the cryptocurrency, before rebounding to the current levels.
Alt Coin and Ethereum Performance
Bitcoin and its crypto peers remain up massively on the year, with bitcoin up ~61% year to date, and is trading above September levels still, but volatility is a feature for crypto traders. The question will be whether this is a typical pullback, or whether the general risk-off mentality signals a more enduring sell-off in the crypto ecosystem.
Ethereum was down slightly less at 15%, but recovered to nearly $4100 from a low in the $3550 range. Ethereum remains up nearly 500% for the year amidst questions over whether it might overtake Bitcoin in the future (Bitcoin’s market cap remains nearly double Ethereum’s market cap, however). Meanwhile, in the last 24 hours alt coins performance includes:
Solana: -5.8% (after a -18% mark earlier today)
Cardano: -10.5% (from -18%)
Ripple XRP: -13.8% (from -20%)
Polkadot: -12.5% (from -21.5%)
Avalanche: -11% (from -18.5%)
BNB/BTC: -5.9% (from -14%).
According to data from Coinglass (formerly Bybt), positions worth around $2.4 billion have been liquidated in the past 24 hours, with BTC representing over 42% of them. The crypto market lost over $ 550 billion in market capitalization to just $1.88 trillion at around 7:20am GMT, before recovering to $2.3 trillion dollars at time of this update.
Bitcoin’s and Ethereum’s Levels
BTC’s fell to a low of $42,587, its lowest level since September 30. The move downwards pushed Bitcoin’s market cap down to $896.13B, or 40.92% of the total cryptocurrency market cap. That leaves Bitcoin down 13.5% for the week, and down 31.2% from its all-time high of $68,990.63 set on November 10.
Ethereum was down only 19.5% off of 52-week highs, but vulnerable to falling through technical support levels around $3750 and then further down at $3300/3500.
It remains to be seen how traders will react to this sharp crash and whether there’s any knock-on effects to broader markets.
(This piece was published at 6:25am ET and updated at 2:30pm ET).
Source: Investing.com
