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Bitcoin falls by a fifth, cryptos see $1 billion worth liquidated

ForexDec 04, 2021 23:51
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2/2 © Reuters. FILE PHOTO: Representation of cryptocurrency Bitcoin is seen in this illustration taken November 29, 2021. REUTERS/Dado Ruvic/Illustration 2/2

By Maria Ponnezhath and Vidya Ranganathan

(Reuters) -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% down at 0920 GMT at $47,495. It fell as low as $41,967.5 during the session, taking total losses for the day to 22%.

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

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

The plunge follows a volatile week for financial markets. Global equities and benchmark U.S. bond yields tumbled on Friday after data showed U.S. 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 (NASDAQ:COIN) Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the U.S. House Financial Services Committee on Dec. 8.

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

Last week, the U.S. 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% 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% for most of November.

Bitcoin falls by a fifth, cryptos see $1 billion worth liquidated
 

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Comments (7)
Marco Lupi
Marco Lupi Dec 04, 2021 12:53
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tremendous opportunity to lose all your money
Ben Delaney
Ben Delaney Dec 04, 2021 11:33
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just keep buying a small amount every week, this will be $4million within 20 years. HODL
Puk Pups
Puk Pups Dec 04, 2021 9:32
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Going down to $31000
Mareks Boriss
Mareks Boriss Dec 04, 2021 9:32
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It will go to 28k and after to 0
Puk Pups
Puk Pups Dec 04, 2021 9:32
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Владимир Капичников
Владимир Капичников Dec 04, 2021 7:44
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Greenpease against cryptomining
MD Mizan
MD Mizan Dec 04, 2021 7:13
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why happened that.,.
Puk Pups
Puk Pups Dec 04, 2021 7:13
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We need money to buy very cheap shares from stock market. We will buy bitcoin again after we sell stocks
Matt Hester
Matt Hester Dec 04, 2021 6:25
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If your buying, you deserve to lose money.
Matt Hester
Matt Hester Dec 04, 2021 6:24
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Its just a huge con
Darren MNM
Darren_M Dec 04, 2021 6:24
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Yh, it's the new best way to rinse retail of all their hard earned cash!
 
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