- The cryptocurrency has subsequently regained some of its losses.
- Cardano, Solana, Polygon, and Shiba Inu all suffered significant losses.
Investors’ pre-Christmas risk-aversion has wreaked havoc on global markets. Right from stocks to cryptocurrency. Bitcoin became the latest cryptocurrency to succumb to severe selling pressure. Falling by as much as $10,000 in an hour to settle at $42,000 earlier on Saturday.
The cryptocurrency has subsequently regained some of its losses and was last trading at $47,661.75, down more than 16%. Ethereum, the second most valuable cryptocurrency by market capitalization, had a similar sell-off, falling about 15% to $3,905.
Multiple Factors Behind the Slide
A risk-off sentiment that has seized global markets in the aftermath of the release of a revised COVID-19 version and US Federal Reserve Chairman Jerome Powell’s unexpected shift toward hawkishness triggered the collapse.
Powell’s support for a more aggressive reduction of the US Federal Reserve’s bond-buying program, which would reduce systemic liquidity and tighten financial conditions compared to the historically lax circumstances of the previous 21 months, is seen as a negative for market speculative activity.
Risk assets like stocks & #Bitcoin are tanking simply because Powell hinted the #Fed might wrap up the taper a couple of months early and the first 1/4 point rate hike may also come a bit sooner. Imagine what would happen if the Fed was actually serious about fighting #inflation!
— Peter Schiff (@PeterSchiff) December 3, 2021
Euro Pacific Capital’s chief economist and global strategist, Peter Schiff, said on Twitter:
“Risk assets like stocks and Bitcoin are tanking simply because Powell hinted the Fed might wrap up the taper a couple of months early and the first 1/4 point rate hike may also come a bit sooner.”
Cardano, Solana, Polygon, and Shiba Inu all suffered significant losses in the cryptocurrency market, falling between 13 and 20 percent.
According to analysts, a large portion of the selling pressure in the Bitcoin market came from the cash side. Exacerbated by dealers’ highly leveraged holdings in Bitcoin derivatives. Furthermore, prices immediately fell to $42,000 since traders’ stop-loss orders on their derivative contracts were invoked. According to CoinMarketCap, the Bitcoin price today is $47,661.40 USD. And a 24-hour trading volume of $60,141,042,990 USD.
