Time waits for no man, neither for crypto recovery.So it is no surprise that the crypto market resurgence has met with resistance.The market is in decline, and investors are worried that another crypto winter may be on the way.
The cryptocurrency market has once again traded red, with the majority of crypto currencies declining in value.On the other hand, Bitcoin was increasing in value over the previous day, when it hit $39,000.
Bitcoin price drops as extreme fear sweeps the crypto market
At the time of writing, the price of Bitcoin has dropped below $36,000, losing another 2%, to $35,780.
However, the global cryptocurrency market cap is currently at $1.67 trillion, which is down by roughly 7.30% over the past day.
On 5 May 2022, the cryptocurrency market held up well during the day, only to fall by as much as 8% at nightfall due to a global interest rate hike in response to rising prices announced earlier.The crash occurred roughly one month after BTC hit an all-time recovery high of $39,500.
The broad stock market plummeted even more yesterday, such as the Nasdaq 100 and S&P 500.The steep price decline is the worst daily drop since January 2022.Furthermore, the Fear and Greed Index for Bitcoin is at 22, which indicates “extreme fear,” indicating that investors are terrified and may provide a buying opportunity.
On 5 May 2022, Peter Schiff, a prominent Bitcoin detractor, wrote that investors would need cash to pay rising household expenses and predicted that they would continue selling their cryptocurrencies.
He compared the plummeting prices of Bitcoin and crypto-related stocks to a bubble, noting that when it inevitably bursts, the entire industry will get revealed as “malinvestment.”
Meanwhile, other cryptocurrencies have fallen in price as well.Ethereum (-6.11 percent), Binance Coin (-6.6 percent), Solana (-15.19 percent), Dogecoin (-8.98 percent), Avalanche (-12.73%), and Polkadot (-14.18%) have all dropped significantly in the day’s trading session.
Winter in summer: The crypto market is red.Is this an incoming crypto winter?
Crypto enthusiasts have long termed BTC as a store for value.However, as some experts suggest, is the digital asset moving toward becoming a risk-off asset in 2022? Thursday was a bloodbath for traditional and Bitcoin markets.
Bitcoin dropped over 7% on the worst day of trading since 2020, while the Nasdaq fell more than 5%.
In the past day, crypto-tracked futures liquidations have exceeded $400 million.Bitcoin futures lost $191 million in value alone, according to Coinglass data, suggesting most trading activity and open interest was concentrated on the top cryptocurrency by market capitalization.Ether (ETH) futures incurred losses of $64 million.
Liquidations occur when an exchange closes a leveraged position as a safety precaution due to a partial or total loss of the trader’s initial margin.
Futures trading, which only tracks asset prices rather than owning the actual assets, is most susceptible to this type of occurrence.
OKX, the most liquid crypto exchange, saw $161 million in closures.https://www.cryptopolitan.com/news/binance-bnb/ was next with $104 million in liquidations, while FTX had $56 million, according to the data.
Many people hope for a quick capitulation in the trade and cryptocurrency markets.However, while the short-term forecast for Bitcoin appears bleak, one analyst and some evidence indicate that Bitcoin is still on track to become a risk-off asset.
Also, alternative currencies (altcoins)saw a lot of losses on Thursday.ApeCoin (APE) futures lost $11 million, followed by Stepn (GMT) at $10.36 million.Dogecoin (DOGE) futures lost $4.56 million after performing worse than the market.
Throughout the Asian trading session, BTC was down 1%, bringing its one-day loss to almost 8.5%.
The Nikkei 225 index in Japan increased by 1.4% on the day.However, the KOSPI in Korea was unchanged, the Hang Sang index in Hong Kong decreased by 1.4%, and the TAIEX in Taiwan decreased by 0.47%.This suggests that traders were surprised by the price movements and that it could be an indication of a bear market.
Finally, Bitcoin has shown itself to be a store of value, or Gold 2.0, as the Winkelvoss twins put it.As a result, calling Bitcoin a “risk-off” asset may yet be accurate, especially given its current price of around $35,000.
With the current panic market sale trend and prominent global investors’ denunciation of the cryptocurrency market, another crypto winter could be underway.
Source: https://www.cryptopolitan.com/bitcoin-drops-with-over-400-in-liquidation/.