Bitcoin Price Plunges after Big Weekend Selloff

Bitcoin Price Plunges after Big Weekend Selloff

Bitcoin plummeted to a low of about $43,000 over the weekend. As recently as October, the world’s biggest cryptocurrency was trading at almost $69,000, with some analysts hoping it could breach $100,000 in the near future.

This weekend’s fall rounds off a staggering drop of 38% in just under a month. Ether, the second most popular cyrpto, fell by over 20% in weekend trading, but recovered a few percentage points to hover around $4,100.  

Shaken by mixed signals over whether the Federal Reserve would introduce stricter monetary policy controls to tackle rampant inflation, in addition to worldwide concerns over the new Omicron variant, the plunge was worsened by liquidations in the crypto derivatives market.

What does this mean for me?

Fewer people trade crypto on weekends, meaning that crypto markets frequently work with significantly reduced levels of liquidity – offering less protection against sudden drops.

As a crypto trader, if you ever needed proof of how volatile this market is, this past weekend is the evidence you need. Crypto trading requires near constant monitoring to balance against dramatic drops such as these.

As a crypto investor trading on leverage, your losses experienced over the weekend would have been catastrophic. It gives credence to the advice that traders need to work to a plan, especially with volatile instruments. They should not commit too much of their portfolio on one instrument.

Crypto is highly sensitive to global economic sentiment, with market uncertainty capable of triggering wild swings like those witnessed over the past weekend.

More news