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Bitcoin finds support at $49,000 after Friday’s overnight plunge
The price of Bitcoin has stabilized on Sunday morning after drastic trading sent the cryptocurrency tumbling more than 17% in just 24 hours…
The price of Bitcoin has stabilized on Sunday morning after drastic trading sent the cryptocurrency tumbling more than 17% in just 24 hours.
According to data from Coin Metrics, the cryptocurrency traded at $48,953 around 9:15 a.m. Sunday on Wall Street. The move towards the $50,000 mark comes after bitcoin dropped to a low near $43,000 on Saturday, after trading around $57,000 on Friday.
From a 24-hour period spanning early Friday morning to early Saturday morning, bitcoin’s price went from about $57,000 to $47,000, losing $10,000, or more than 17%.
Meanwhile, Bitcoin’s sharp tumble follows Friday’s risk-off tone in the broader market. All three major averages finished Friday’s trading in the red and posted losses for the week amid fears over what the omicron Covid variant means for the ongoing economic recovery.
According to CNBC, investors ditched equities in favour of safer areas of the market, with the yield on the 10-year U.S. Treasury moving lower. The Nasdaq Composite underperformed the Dow and S&P 500 on Friday, with technology stocks getting hit especially hard. This selling extended to cryptocurrencies, with no fundamental reason prompting the sharp declines across the crypto universe.
Although there was no clear reason for the Bitcoin drop, especially overnight Saturday when the losses accelerated, investors fear a worse scenario over time.
“The evidence points to this being yet another derivative-induced selling event,” wrote J.C. Parets, chief market strategist for All-Star Charts technical research, in a note Saturday morning.
“The September flash crash had the same drivers as this selloff — leverage was flushed from the system in a violent fashion, which later enabled the market to eventually move higher toward a new all-time high in October.”
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