On Saturday, Bitcoin lost a fifth of its value as a mix of profit-taking and macroeconomic concerns caused roughly a billion dollars in selling across cryptocurrencies.
At 9.20 a.m. GMT, bitcoin was down 12% to $47,495 (€41,980.83). The session went as low as $41,967.50 (€37,095.07), bringing the day’s losses to 22%.
Ether, the token tied to the Ethereum blockchain network, fell more than 10% as part of the broader cryptocurrency selloff.
According to cryptocurrency tracking site Coingecko, the market value of the 11,392 currencies it monitors has fallen about 15% to $2.34 trillion (€2.07 trillion). Last month, Bitcoin touched a record $69,000 (€60,989), momentarily crossing $3 trillion (€2.65 trillion).
What caused the market to crash?
The drop comes after a tumultuous week in the global markets. On Friday, global markets and benchmark US bond rates fell as data revealed that US job growth slowed in November and the Omicron strain of the coronavirus left investors on edge.
According to Justin d’Anethan, the Hong Kong-based head of exchange sales at cryptocurrency exchange EQONEX, he has been observing the growth in leverage ratios throughout the cryptocurrency markets and how significant holders have been shifting their coins from wallets to exchanges. The latter is frequently an indication of a desire to sell.
“Whales in the crypto world appear to have transferred coins to a trading venue, used a bullish bias and leverage from regular traders, and then pushed prices down,” he explained.
The selloff also comes ahead of a December 8 appearance before the US House Financial Services Committee by officials from eight prominent cryptocurrency businesses, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried.
The hearing will be the first time that significant participants in the crypto markets will testify in front of US Congress as policymakers wrestle with the ramifications of cryptocurrencies and how to regulate them effectively.
Last week, the US Securities and Exchange Commission (SEC) rejected WisdomTree’s second spot-Bitcoin exchange-traded fund application.
Data from another site, Coinglass, revealed that approximately $1 billion (€883.9 million) in cryptocurrencies had been sold in the previous 24 hours, with the vast majority being on digital exchange Bitfinex.
