Bitcoin appeared to stabilize on Sunday after an unusually harsh sell-off, but the largest cryptocurrency was still on track for its worst weekly performance in eight months.
As of press time, bitcoin (BTC) was changing hands just below $35,000, up 1.6% over the past 24 hours. More than $1.5 billion of bitcoin trading positions were liquidated over the past three days due to margin calls, according to the data site Coinglass.
The bitcoin price is down 19% in the past seven days – the cryptocurrency’s worst weekly performance since May 2021, when fears of China’s renewed crackdown on cryptocurrency trading and mining sent the market reeling, and tweets by Tesla CEO Elon Musk focused public attention on the Bitcoin blockchain network’s potential environmental harms.
This time around, crypto traders appear to be pricing in fears that the Federal Reserve will move quickly over the next few months to tighten monetary conditions that have been at historically loose levels since the coronavirus struck the economy in March 2020. The Fed’s stimulus – including trillions of dollars of money printing – were widely cited as a reason for bitcoin’s price gains in 2020 and 2021, including the ascent to an all-time high price of $69,000 in November.
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