Bitcoin Drops Over $10,000 in Value in 24 Hours

Global financial markets rout plunged Bitcoin, the world’s most dominant cryptocurrency, by $10,000 to $47,000 a coin, according to the data obtained from Coindesk.

Bitcoin was trading at slightly above $57,000 a coin on Friday before falling by 17 percent or $10,000 to $47,000 within 24 hours to further highlight the state of the global financial markets amid growing concerns over the Omicron COVID variant spread.

Ether, the second most capitalised cryptocurrency, also sheds 10.26 percent to $4,047.96 a coin while Solana, XRP, Terra (Luna), Cardano and Stellar dropped 10.19 percent, 17.54 percent, 11.96 percent, 13.95 percent and 16.74 percent to $204.67, $0.796952, $60.85, $1.40 and $0.292059, respectively.

There is no clear reason as to why bitcoin and other cryptocurrencies are falling besides rising global uncertainty surrounding the fast-spreading Omicron covid variant.

Selling pressure in the Bitcoin spot market seems to have dragged on the entire cryptocurrency before triggering huge stop losses in the derivative markets.

“The evidence points to this being yet another derivative-induced selling event,” wrote J.C. Parets, chief market strategist for All Star Charts technical research, in a note Saturday morning. “The September flash crash had the same drivers as this selloff — leverage was flushed from the system in a violent fashion, which later enabled the market to eventually move higher toward a new all-time high in October.”

Despite the uncertainty surrounding financial assets, El Salvador, the first country to accept Bitcoin as a legal tender, announced it has bought the dip. President Nayib Bukele acquired 150 Bitcoin for about $48,700 a coin.

Tether (USDT), the largest stablecoin by market value, moved away from its 1:1 peg against the US Dollar to $1.025, largely because of its usage as a hedge against market uncertainty. Traders usually move their cryptocurrency to USDT during high market uncertainty.

“Our expectation for the coming days/weeks is sideways choppy price action. A contraction and basing process is likely to take place after such a violent move and we want to treat sharp upward rallies suspiciously right now,” added Parets.