Bitcoin (BTC) has dropped below $47,000 in the last 24 hours, dropping roughly 20% of its value. This is the greatest one-day decrease since May 15, when the price of Bitcoin fell to roughly $33,000 for a brief period.
As a result, Bitcoin’s bear market cancels out the two-month-long bull market that began on September 29 and ended on November 8, when the digital currency climbed over 63 percent to an all-time high of $67,602. However, several Bitcoin observers, like TechDev, have noticed a consistent pattern in Bitcoin’s price activity throughout the years.
TechDev said on Twitter, “Every #Bitcoin cycle has ended with a red month followed by two or three extremely green months.
Another factor contributing to Bitcoin’s two-month losing streak is widespread resistance from US authorities, who have called the CEOs of key crypto exchanges such as Binance US and FTX to testify at a hearing on crypto-assets.
On the other hand, notable entrepreneurs such as the CEO of cryptocurrency educational platform Eight Global, Michal van de Poppe, seem to think that the bear market is over and that the Bitcoin price is going to settle.
Despite worries about volatility and noncompliance with standard banking practices, Bitcoin remains a potential asset for countries with shaky economies.
Zimbabwe’s government is considering adopting Bitcoin as a mainstream currency, following in the footsteps of El Salvador. According to trading bots, the head of the president and permanent secretary cabinet’s e-government tech unit, retired Brigadier Colonel Charles Wekwete, indicated that talks with firms are already ongoing.
The authorities intend to adopt legislation to safeguard customers from financial concerns such as money externalization, unlicensed cross-border transfers, and money laundering, as per Wekwete.
Selling on the spot market appears to have pushed the crypto lower before triggering massive stop losses in the derivative markets.
Laurent Kssis, a crypto exchange-traded fund specialist and CEC Capital’s director, said, “So far I’ve seen upwards of 4,000 Bitcoin being sold that pushed the market abruptly down.” Furthermore, she added, “In fact, 1,500 BTC alone was sold in less than a minute at the time of the drop.”
According to data, the price collapse has resulted in roughly $600 million in Bitcoin futures positions being opened in under an hour. Earlier during the week, the market appeared to be over-leveraged, with open interest (OI) in Bitcoin terms reaching an all-time high.
On Tuesday, Arcane Research’s weekly note said, “The Bitcoin denominated open interest has now remained above 365,000 Bitcoin for more than a month. It is not common to see such a high open interest being sustained for such a long duration. This could suggest that the market is currently over-saturated with leverage.”
Tether (USDT), the world’s most valuable stable coin, jumped to $1.025 on a Nasdaq-listed exchange, deviating from its customary one: one peg.
Because Tether’s value is tethered to the US dollar, a conventional market risk-off asset, investors often treat it as a safe place during price drops.
The drop to the lowest level since late September comes amid concerns about the Omicron version of COVID-19 and the Federal Reserve’s growing dissatisfaction with excessive inflation. On Tuesday, Fed Chair Jerome Powell dropped the term “transitory” from the discussion of inflation and suggested that the central bank might reconsider it in the future.
Despite this, some people are taking advantage of the downward market to “buy the dip.” President Nayib Bukele of El Salvador, whose country has Bitcoin on its financial statements and has bought coins during past drops, announced another acquisition of 150 Bitcoins for about $48,700 a piece.
Bitcoin’s price fell, dropping about $10,000 in less than an hour to a low of $42,000 before rebounding to $45,000.
Over the last 24 hours, Bitcoin has lost $15,000 in value. Ether, the second most valuable cryptocurrency by market value, declined approximately $1,100 in the same time frame.
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