On Saturday, Bitcoin’s price saw yet its largest drop in a single day in more than three months, dipping to $45,063.
This is after fresh concerns of the new Covid variant suppressing markets and fears of Mt Gox creditors dumping their Bitcoins gripped market participants, sending them into a selling frenzy.
In less than four hours since Asian Market’s open time, Bitcoin had shed over 21% of its value, further worsening the situation witnessed for the whole of the week. During the drawdown, other cryptocurrencies also exhibited similar weakness with Ethereum losing a grip of the $3,950 support seeing the asset lose over 16% in value.
Smaller altcoins took the biggest hit with coins such as Litecoin losing over 30% in gains, Dogecoin over 33%, and Shiba Inu over 25%.
According to data from Coinglass, the total number of liquidations in the last 24 hours exceeded $2.5 Billion with Bitcoin leading the pack at over $1 Billion in liquidations. During the period, 388,871 traders were liquidated with the largest single liquidation order happening on Bitfinex where a single trader lost $27.74M.
Warning Signs Were There
Despite the dump which comes as a surprise to many, there were signs of incoming dumping as early as last week. According to data from on-chain data aggregator, Santiment, Bitcoin’s exchange inflows had outpaced outflows significantly, as FUD combined with a rise in the new covid variant concerns caused traders to consider selling funds.
As of Wednesday, Santiment’s data feed had picked over 10,242 more BTC moving on to exchanges compared to those moving off exchanges.
The site also showed that addresses with 100 to 10k BTC had sold or redistributed 6000 BTC between Monday and Wednesday even as the balance on exchanges increased by 20,000BTC.
Omicron, Mt Gox Fears Surge
As reported earlier, heightened fear brought by the new covid 19 variant, omicron, labeled by WHO as being “of concern” has also a role to play in the continued market weakness.
A few hours before Saturday’s sell-off, Horizon Fintex president, Mark Helowitz had said, “Bitcoin is trading in a narrow range and a lot of it has to do with the Omicron variant.”
Following WHO’s announcement of the new variant last week, the S&P500 dropped hard, bringing along with it other stocks and cryptocurrencies in a situation similarly witnessed in March 2020.
There are also fears that Mt Gox’s ”final and binding” rehabilitation plan could further suppress Bitcoin’s price if creditors decide to dump their holdings which run north of 150,000 coins.
Despite the sell-off, believing that this is yet another bottom, various market participants including El Salvador have taken advantage of the volatility to scoop up more coins. At press time, bitcoin is trading at $47,083.