As markets across all sectors end the week in the red, tens of thousands of cryptocurrency traders have had their positions liquidated.
The cryptocurrency futures trading and information platform Coinglass reports that over $751 million worth of trader positions in digital assets were wiped out in a 12-hour span on November 25th. Among these losses, 85.2% came from investors holding long positions.
Technology reporter Kate Rooney appeared on CNBC’s Squawk Box to discuss what might be causing the broader sell-off that’s hitting Bitcoin (BTC) particularly hard.
“It’s really a macro-driven selloff. For Bitcoin this morning, the cryptocurrency dropping [to] near $53,000. That’s the lowest level we’ve seen since October.
Bitcoin’s now off by 20% from that all-time high of $69,000 it hit earlier in November. That move [is] officially putting it in bear-market territory.”
Rooney says that indications of a new coronavirus variant are sending shockwaves across markets worldwide.
“This is really the same knee-jerk reaction we’re seeing in tech and some of the higher-growth names with news of that covid variant. Bitcoin [is] still seen as that riskier asset. The inflation and safe-haven narrative [is] really not sticking quite yet.”
The tech reporter says it’s still too early to tell whether BTC has ended its bull cycle or is setting a new floor before its next run-up.
“That’s the open question. Is this a new bear market? We’ve seen crypto winters before, where the price drops as much as 70% or 80%. Others are saying this is just a higher low. It looks to be finding a bottom around $53,000, but that’s still an open question.”
At time of writing, BTC is trading at $54,602, down 6.54% on the day.