The widespread sell-off of the cryptocurrency also saw ether, down more than 10%.
Bitcoin dropped a fifth of its value on Saturday as a combination of profit-taking and macroeconomic concerns triggered nearly a billion dollars worth of selling activity across cryptocurrencies. Bitcoin is down 12% at $47,495. It fell to as low as $41,967.5 during the trading session, bringing the total loss for the day to 22%.
The widespread sell-off in crypto also saw ether, a coin linked to the ethereum blockchain network, drop more than 10%.
Based on crypto data platform Coingecko, the market capitalization of 11,392 coins it tracks has dropped by nearly 15% to $2.34 trillion. That value briefly surpassed $3 trillion last month, when bitcoin hit a record $69,000.
The drop comes after a volatile week for financial markets. Global stock markets and benchmark US bond yields fell on Friday after data showing US job growth slowed in November and the Omicron variant of the coronavirus kept investors interested.
Justin d’Anethan, head of Hong Kong-based exchange trading at crypto exchange EQONEX, said he has been watching the increase in leverage across crypto markets as well. like how major holders move their funds from wallets to exchanges. The latter is often a sign of intent to sell.
“Whales in the crypto space appear to have moved coins to the trading venue, taking advantage of the uptrend and leverage from retail traders, to then push the price down,” he said.
The sell-off also came before the testimony of executives from eight major crypto firms, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the Commission. US House of Representatives Financial Services on December 8.
The hearing marks the first time major players in the crypto market will testify before US lawmakers, as policymakers grapple with the implications of cryptocurrencies and how to regulate them. Adjust them best.
Last week, the US Securities and Exchange Commission (SEC) rejected a second spot bitcoin exchange-traded fund proposal from WisdomTree.
Data from another platform Coinglass shows that nearly $1 billion worth of cryptocurrency has been liquidated in the past 24 hours, with the majority being on digital exchange Bitfinex.
“If anything happens, this is a bearish buying opportunity for many investors who may have previously felt as if they missed the boat. We could see Tether being bought at a premium, suggesting people are getting ready cash, in the crypto space, to do it,” said D’Anethan, referring to the largest stablecoin in the crypto world.
The drop in bitcoin funding rates – the cost of holding bitcoin through perpetual futures peaked at 0.06% in October – also suggests that traders have turned bearish.
Funding rates on crypto trading platform BitMEX have dropped to negative 0.18% from 0.01% for most of November.
