Bitcoin tried to stage a comeback on Sunday, but returned gains almost as quickly as they came in the early afternoon.
While just now 1.99% At $49,321.65, as tracked by crypto news website CoinDesk, Bitcoin was down 1.3% as of 2:32 p.m. EST to around $48,506.
Bitcoin’s decline in the early hours of Saturday built on losses that began a month ago and escalated after the Federal Reserve said monetary support to markets would soon begin to fade. On Saturday, Bitcoin lost 20% before recovering, in trades that saw it lose around $10,000 per hour, CoinDesk said.
Bitcoin, the largest cryptocurrency by market value, fell to $42,000 at midnight EST on Saturday before recovering. Including that drop, its value is down about 29% since its all-time high on Nov. 8, around the same time speculative stocks began to tumble.
The losses appear tied to uncertainties over the Omicron variant of the coronavirus and remarks by Fed Chairman Jerome Powell to Congress last week that the central bank would accelerate the removal of its pandemic bond buying program in response to the inflation. The stock market also retreated.
Cryptocurrencies are much more volatile than stocks or government-issued currencies. Other cryptocurrencies also fell sharply at the start of the weekend, a sign that investors are moving away from riskier bets.
Ether, the second largest cryptocurrency, also fell by more than 15%, but had erased that loss on Sunday to trade slightly higher. Other widely traded cryptocurrencies, including Solana, Dogecoin, and Shiba Inu coins, traded lower.
Saturday’s drop lowered the total market value of the crypto universe almost 400 billion dollars to around $2 trillion, before rising to around $2.2 trillion, according to CoinMarketCap.com, MarketWatch reported.
NYDIG, a technology and financial services company dedicated to bitcoin, estimated on Saturday that $1.1 billion in leveraged bitcoin positions and $2.5 billion in leveraged crypto positions (including bitcoin ) had been liquidated in the past 24 hours, marking the largest such theoretical liquidation since September. . 7.
NYDIG also suggested that it was seeing positive trends for bitcoin and crypto: “On our desk, we saw two-way flows today with 84% of bought flows on our trading desk, excluding trades. harvesting tax losses,” NYDIG wrote on Saturday.
Another factor that may have accelerated Bitcoin’s selloff was the unwinding of highly leveraged crypto derivatives, Noelle Acheson, head of market intelligence at crypto lender Genesis Global Trading, said. Recount The Wall Street Journal. She pointed to a large sell order that could have triggered margin calls and liquidations for investors.
Salvadoran President Nayib Bukele announced on Saturday that his country has “bought the dip“, picking up 150 coins for an average of $48,670 each. wrote later that the country missed the bottom “by 7 minutes”, followed by a laughing emoji. El Salvador in September became the first country to adopt bitcoin as a national currency.
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