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Selling Hits Crypto Market Again as New COVID Variant Spooks Traders

Source: Adobe/eyeofpaul

Selling pressure once again hit the crypto market on Friday, after stock markets in Asia and US stock futures all pointed lower on fears over a new variant of the coronavirus that is spreading in South Africa.

At 10:28 UTC, bitcoin (BTC) was down by 6.5% over the past 24 hours, trading at a price of USD 54,735. At the same time, ethereum (ETH) was down by 6.4% to a price of USD 4,077.

Both cryptoassets fell today after seeing gains yesterday, with the sentiment then appearing to be turning positive after two weeks of mostly lower prices for bitcoin.

Following today’s sell-off, however, bitcoin is now trading below its low from Tuesday this week of USD 55,300, which at the time marked the lowest price since October 13. With today’s crash down to the USD 54,000-level, sentiment is once again turning negative among traders.

And as usual when selling pressure hits the market, leveraged traders who have bet on the wrong outcome get liquidated.

Over the past 4 hours, the overall crypto derivatives market saw close to USD 440m of mostly long positions liquidated, with the majority, as usual, being on Binance. For BTC alone, total crypto market liquidations stood at USD 116m, with USD 50m of that seen on Binance, data from Coinglass showed.

Despite this, industry insiders remained optimistic about the prospects of the crypto market, with for instance Hunter Horsley, CEO of cryptoasset manager Bitwise, telling Bloomberg today that the current move looks like it is driven by “flows and transitory sentiment.”

“When we look at the fundamental thesis and drivers of the space, they continue to look incredibly optimistic,” Horsley said.


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