Bitcoin price leads a bearish wave with a 20% drop

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on Dec 4, 2021
  • Bitcoin price saw a massive drop over the last several hours, losing around 20% of its value.
  • The price drop affected the entire crypto sector, as well as the traditional financial industry.
  • A lot of it comes from the uncertainty due to the newest COVID-19 variant, according to experts.

The crypto market is experiencing another one of its hiccups, with the prices crashing quite a bit over the last 24 hours. Bitcoin (BTC/USD), for example, dropped alongside other coins today, with its price going down by over 20%.

The new behavior serves as another indicator of the risk aversion that is sweeping across the financial markets. The coin went from $57,300 on December 3rd, to a bottom at $45,000 only a few hours ago. Since then, it managed to make a very slight recovery as its price jumped back to $47,845, although it is unknown currently whether or not the price will manage to recover to a greater extent.

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Ethereum (ETH/USD) saw a crash of its own, going down by 17.4% before trimming the retreat to approximately 10%. CoinGecko data indicates that the crypto market lost around one-fifth of its value in a sudden bearish wave.

The global financial market suffers as well

The crypto price drop is not an isolated incident, however. It came in the middle of a very volatile period for financial markets as a whole. With the inflation spiking, central banks are forced to tighten their monetary policies, which threatens to reduce liquidity.

Amid all of this, the latest variant of the coronavirus, named Omicron, also had an impact that led to risk aversion due to global concerns regarding what it all might mean for the reopening of the global economy. Stocks from all corners of the world have seen a price drop of over 4% on average in November. Meanwhile, the only ones that have seen rallies are haven assets like Treasuries.

Early Saturday also saw the liquidation of approximately $2.4 billion in crypto exposure, including long and short positions. This is the greatest liquidation since the one that took place on September 7th, according to the available data.

It also doesn’t help Bitcoin’s case that it lost over $21,000 since hitting an all-time high on November 10th. However, even with the price drops, Bitcoin is still up over 60% this year, which still makes it better than most other assets.

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