After an overnight bout de volatility that sent Bitcoin (BTC), the largest cryptocurrency, to six-month lows on Friday, it remained lower on Friday.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
$40,000 optimism unwinds
Cointelegraph Markets Pro and TradingView data showed that BTC/USD reversed at $38,250, after it had lost over $4,000 within hours.
The market was trading at $39,000 as of the writing. This sudden downturn came just as BTC hit multi-day highs and passed $43,000.
The liquidity across trading platforms was therefore predictable. The 24-hour total for Bitcoin and altcoins was $725 million. BTC positions accounted for $292 million.
The majority of casualties were in long positions, which is a sign that the $40,000 area has attracted significant faith as a support line.
Chart of crypto liquidations. Source: Coinglass
Cointelegraph reported that Friday’s options expiry involving open interest of almost $600 million was the primary cause for volatility. However, external triggers like Russia’s blanket ban on crypto trading or mining seemed to have very little to no effect.
Michael van de Poppe, a Cointelegraph contributor, explained that Bitcoin’s price of $42.4-42.7K could not continue to hold. Therefore, a nuke was sent towards the other side and most likely, a continuation towards lower lows and further downwards momentum -> occurred.
It was a long-awaited move, with some more conservative analysts anticipating a return to $30,000 or lower throughout January.
Ethereum returns to its established support
Altcoins took a much more severe hit when Bitcoin crashed.
10% drop was common in the top ten cryptocurrencies based on market capital. Rebounds were limited and Terra (LUNA), reining losses down to below 5%.
Related: Analysts predict next BTC price explosion after breaking the ‘bear’ market in Bitcoin demand
Ethereum (ETH), which fell to critical support at $2,800, the spot of an all-time high in April, to cap weekly losses close to 15%, was hit.
BITSTAMP: ETH/USD 1-hour candle charts Source: TradingView
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.