Bitcoin Price Reached $42,000, Crashing By 20% In A Few Hours
The price of bitcoin dropped sharply by 20% or more than $11,000 this morning, at some point reaching around $42,000. 24 hours before, the first cryptocurrency was trading above $54,000, and at the time of publication its value is $47,700.
Ethereum fell below $3,500 and subsequently returned to $4,000. Almost no major cryptocurrency has been able to avoid a 15-25% decline. Ether, however, has fallen in price less than bitcoin, thanks to which it has risen a little more relative to it, demonstrating strength since mid-October.
Analysts believe that the collapse was initially caused by sales on the spot market, which triggered the triggering of a large volume of stop-losses and liquidation of derivative positions.
"We saw the sale of 4,000 BTC, which sharply moved the market down," said Laurent Cassi, an expert on exchange—traded crypto funds and director of CEC Capital. "In fact, 1,500 BTC was sold in less than a minute."
Coinglass data shows that the depreciation was associated with the liquidation of $600 million in futures within an hour. During the day, the volume of liquidations exceeded $ 2.5 billion. Earlier, analysts warned that similar events could occur in the market, taking into account large volumes of leverage.
"The open interest denominated in bitcoin for longer than a month is 365,000 BTC. He is rarely able to hold himself so high. On this basis, it can be assumed that the market is currently oversaturated with leverage," Arcane Research wrote on Tuesday.
The price of the Tether stablecoin on the Coinbase exchange temporarily rose to $1,025 – the highest level since the collapse on May 19.
At the same time, the President of El Salvador, Nayib Bukele, announced that he was "buying on a rollback" again, and added 150 BTC to the country's reserves at an average price of $48,670.
"$50,000 is likely to play the role of resistance for quite a long time, unless the stock market does the incredible. The scale of the collapse and distribution suggest consolidation with the approach of the first quarter of next year. The trip to the moon is not over, but someone will think about completing the cycle," said the co-founder of the Decentrader trading platform under the nickname filbfilb.