Source: AdobeStock/Quality Stock Arts
The crypto market saw heavy selling across the board today in a deleveraging event that followed the signing of a new infrastructure bill that targets crypto users in the US, and signals from Twitter that the company is not looking to buy bitcoin (BTC) at the moment.
At 13:00 UTC, bitcoin was down by 8% over the past 24 hours and down 10% for the past 7 days, currently trading at USD 60,652. At the same time, ethereum (ETH) was down just over 10% for the past 24 hours and 11% for the past 7 days, trading at USD 4,267.
90-day BTC price chart:
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90-day ETH price chart:
Source: CoinGecko
Along with the market sell-off came liquidations of leveraged crypto derivatives trading positions. According to data from Coinglass, USD 296m were liquidated across the entire crypto market over the past four hours as of press time, with around USD 135m of that seen on Binance alone. In the past 24 hours, almost USD 900m in trading positions were liquidated, per Bybt.com data.
Looking at bitcoin specifically, USD 86.4m were liquidated across exchanges over the past four hours, with Binance once again seeing the most liquidations among exchanges.
The high levels of liquidations in this time frame followed the even higher liquidations seen overnight, as the price of bitcoin first dropped below the USD 63,000 mark around midnight UTC time. Until 4:00 UTC, USD 391m in leveraged positions had been liquidated across the crypto space.
‘Bullish market structure remains largely intact’
Meanwhile, some observers attributed the latest drop in prices to the controversial infrastructure bill that US President Joe Biden signed into law on Monday. The bill contains provisions that could make it more difficult to stay anonymous as a crypto user, while also potentially increasing the tax burden for crypto users.
Further, the selling today also follows a report from the Wall Street Journal in which Twitter’s Chief Financial Officer (CFO), Ned Segal, said that putting bitcoin on the company’s balance sheet “doesn’t make sense right now.”
“We [would] have to change our investment policy and choose to own assets that are more volatile,” Mr. Segal said, while noting that the company still prefers to hold less volatile assets on its balance sheet.
The new comments from Twitter’s Segal come as a bit of a disappointment to BTC fans, given earlier comments from the CFO that the company has “done a lot of the upfront thinking” about putting BTC on its balance sheet.
Other commenters online, however, argue that the drop had nothing to do with the Act nor Twitter, but rather that it was an expected correction.
Commenting on today’s drop in prices, Mikkel Morch, Executive Director and Risk Management at digital assets hedge fund ARK36, called the event “a leverage shakeout” that will be beneficial in the long run.
“At the moment, the overall bullish market structure remains largely intact. In fact, a sudden price drop results in a leverage shakeout which contributes to a healthier market that is better set up for an uptrend continuation in the medium term.”
On a similar note, Martha Reyes, Head of Research at digital asset prime brokerage and exchange BEQUANT, said that a sell-off is natural given that bitcoin has rallied 50% in the last two months.
“That rally got overextended on the higher than expected CPI [Consumer Price Index] print in the US and we are now in a reassessment phase,” Reyes said, noting that inflation concerns and a hunt for yield will likely push bitcoin higher before the end of the year.
“In Q4 companies will pass more of their costs on to consumers in the context of strong demand. The hunt for yield will continue unabated and thus we see good support for BTC at 60k,” BEQUANT’s researcher said.
Check other news for today and Please stand by..
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