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Bitcoin (BTC) falls nearly $10,000 in 1 hour

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Bitcoin (BTC) has fallen nearly $10,000 in just 1 hour and even hit a low of around $41,650. In the last 24 hours, $2.5 billion in positions have been liquidated across the cryptocurrency market.

A sharp drop

Bitcoin (BTC) has seen a sharp drop of nearly $10,000 in just 1 hour. The price of BTC fell from $52,000 to $42,000 in less than 60 minutes before rebounding to $47,000. As a result, the price of BTC has fallen by about $15,000 in the last 24 hours. It was trading at around $46,900 at the time of writing.

Bitcoin's price performance over the past 24 hours (Source: TradingView)

Bitcoin’s price performance over the past 24 hours (Source: TradingView)


Meanwhile, Ether (ETH) has held up better and lost about 14% in 24 hours with a low of about $3500. The top 10 cryptocurrencies in terms of capitalisation all fell by more than 10% in 24 hours led by Polkadot (DOT) and a 21% drop.

As panic set in, leveraged positions unwound and traders capitulated. According to the Coinglass website, approximately $2.5 billion of positions have been liquidated in the last 24 hours.

According to Coinglass, more than 80% of the liquidations were long positions. Bitcoin accounted for 60% of these liquidations. Binance and Okex accounted for about 58% of all liquidations.

Liquidation in the last 24 hours (Source: Coinglass)

Liquidation in the last 24 hours (Source: Coinglass)

What are the reasons for this drop?

The recent announcement of the latest Covid-19 variant, Omicron, may be an underlying factor in the recent bearish market sentiment.

The bearish movement has also been attributed to speeches by US Federal Reserve Chairman Jerome Powell. On Tuesday, he told the Senate that it was time to remove the word “transitory” to describe inflation:

Inflation is manifesting itself in the US in a pretty serious way. The FED is going to have to move a little faster. That would slow down all assets. It would slow down the cryptocurrency market and the NASDAQ if we were to start raising rates a lot faster than expected.

Excessive leverage by traders could also be part of the reason for tonight’s violent move.

A drop that did not scare everyone, as El Salvador took advantage of the situation to acquire an additional 150 BTC at an average price of $48,670. The country now holds 1,270 BTC in its national reserve

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