- Bitcoin prices dropped sharply Saturday, taking total losses to 22%.
- A broad crypto selloff also saw ether, the coin linked to the ethereum blockchain network, plunge more than 10%.
- The plunge follows a volatile week for financial markets.
Bitcoin prices dropped sharply overnight Saturday, plunging to a low near $43,000. From a 24-hour period spanning early Friday morning to early Saturday morning, bitcoin’s price went from about $57,000 to $47,000, losing $10,000, or more than 17%.
In the Indian market, Bitcoin is trading at Rs 34,87,515, down 18.5 percent. Other major cryptocurrencies like Ethereum (Rs 28,19,714) fell by 15.8 percent and Binance Coin (Rs 39,698) by around 15.8 percent. On the other hand, Gifto (Rs 6.62) rose over 54 percent over the last 24-hours. Tether is up over 0.2 percent (Rs 75.36) while Dai is by 0.15 percent (Rs 74.24).
Ethereum, the second-largest cryptocurrency by market capitalization, also fell to as low as $3,905 on the day, declining by almost 15 percent. At the time of writing this article, the altcoin gained some momentum to stand at $3,946.76 per unit. This was still down by 13.46 percent over the last 24 hours and by 5.18 percent over the last seven days.
Bitcoin price: Why is crypto down today?
As per reports, the crash is an outcome of a risk-off sentiment among investors that has been triggered by the detection of the new Omicron variant of Covid-19. It can also be attributed to a sudden incline towards hawkishness by US Federal Reserve Chairman Jerome Powell. Coming into this week, analysts cited a number of crypto obstacles including US tax-reporting requirements for digital currencies, China’s intensifying regulatory clampdown, and India’s sights on a new bill that could ban most private cryptocurrencies.
Based on cryptocurrency data platform Coingecko, the market capitalization 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 selloff also comes ahead of testimony by executives from eight major cryptocurrency firms, including Coinbase Global. The funding rate on cryptocurrency trading platform BitMEX fell to a negative 0.18% from levels of 0.01%
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 said.
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