Early Saturday morning selling took place at a level not seen in months as 375,113 trades were liquidated.
DOTUSD was the largest single liquidation order on Bifinex – valued at $28 million, with about a billion dollars wiped from traders with exposures in its futures market.
The market value of crypto has dropped by nearly 20% over the last day, trading at $2 trillion.
A new variant of the Coronavirus and hawkish comments by the US Federal Reserve has had investors concerned. Charlie Munger, a veteran investor, compared the crypto market’s price action with the dot-com bubble that popped.
As a result of the “listless” nature of Bitcoin’s price action over the past few weeks, the evidence of a slow downtrend on high timeframes and choppy movements on lower timeframes caused traders to fear the bull run was over.
Bitcoin analysts concluded that once Bitcoin breaks out of its current range, the best level of support lies between $45k, near where the price broke down during the May crash earlier this year.
Labour shortages and supply chain problems were caused by lockdowns and stimulus checks. As a result, labour and product prices rose. Now, there’s the growing expectation that the Federal Reserve must raise interest rates to combat inflation.
Inflation hedges such as Bitcoin, however, are dropping today due to the high correlation between BTC and S&P 500 stocks as Bitcoin has increasingly become a mainstream investment.