Fueled by uncertainty over the Federal Reserve inching toward tighter monetary policy in the face of surging inflation, and global fears over the new Omicron variant of COVID-19, the dramatic crash was super-charged by liquidations in the crypto derivatives market, market players say.
Only Friday, Bitcoin sat above $57,000 before the risk aversion hammering stocks spilled over into crypto world dragging the premier digital coin down by as much as 20% on the day to below $43,000. On Sunday, the currency bounced by over 2% to trade around 49,000.
According to estimates by Larry Cermak at The Block Research, nearly $5 billion in open interest was wiped out in as little as half an hour. That helped to shave cryptocurrency’s total market capitalization down to $around $2.3 trillion, off sharply from last month’s record high above $2.6 trillion.
In some parts of the market, BTC’s price collapsed even lower, with some exchanges pricing it as low as $28,000 according to Jason Lau, chief operating officer of the cryptocurrency exchange Okcoin.
