NEW YORK: Bitcoin lost a fifth of its value on Saturday as a combination of profit taking and macroeconomic concerns triggered nearly $ 1 billion in sales through cryptocurrencies.
Bitcoin was down 12% as of 9:20 a.m. GMT at $ 47,495. It fell to $ 41,967.5 during the session, bringing the day’s total losses to 22%.
The large sell-off of cryptocurrencies has also seen ether, the coin linked to the ethereum blockchain network, plunge by more than 10%.
Based on the cryptocurrency data platform Coingecko, the market cap of the 11,392 coins it tracks has fallen almost 15% to $ 2.34 trillion. That value briefly crossed $ 3 trillion last month, when bitcoin hit a record high of $ 69,000.
The plunge follows a volatile week for financial markets. Global equities and benchmark US bond yields fell on Friday after data showed US job growth slowed in November and the omicron variant of the coronavirus kept investors on the lookout .
Justin d’Anethan, Hong Kong-based exchange sales manager at cryptocurrency exchange EQONEX, said he has observed the increase in leverage ratios in cryptocurrency markets as well as how whose large holders had moved their coins from wallets to exchanges. The latter is usually a sign of intention to sell.
âThe whales in the crypto space appear to have moved coins to the trading platform, taken advantage of a bullish bias and the leverage of retail traders, and then brought prices down,â he said. -he declares.
The liquidation also precedes the testimony of executives of eight major cryptocurrency firms, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the US House Financial Services Committee. December 8.
The hearing marks the first time that major players in the crypto markets will testify before U.S. lawmakers, as policymakers grapple with the implications of cryptocurrencies and how best to regulate them.
Last week, the U.S. Securities and Exchange Commission (SEC) rejected a second WisdomTree spot bitcoin exchange-traded fund proposal.
Data from another Coinglass platform showed that nearly $ 1 billion worth of cryptocurrency had been liquidated in the past 24 hours, with most of it on the digital exchange Bitfinex.
A drop in bitcoin funding rates – the cost of holding bitcoin through perpetual futures that peaked at 0.06% in October – also showed traders had turned bearish.
The funding rate on cryptocurrency trading platform BitMEX fell to minus 0.18% from levels of 0.01% for most of November.