One of the major reasons for the recent Bitcoin nosedive is institutional investors setting off aggressive liquidations in the crypto derivatives market.
The current state of the market is worrisome, to say the least. Everybody seems to be looking for a scapegoat; according to a trading executive, it’s institutions selling their BTC holdings, including an institution that got rid of more than $500 million (~£376 million) worth of Bitcoin on Friday, 3rd December. BTC price plummeted less than 24 hours after the sale.
$1.3 billion (~£980 million) in long positions was liquidated on the same day, causing the cryptocurrency to drop from $51,000 to $42,000. Open interest in the derivatives market fell from $21.6 billion (~£16.28 billion) to $16.7 billion (~£12.59 billion).
However, when one door closes, another opens. Major players still keep coming to the crypto market, according to Aya Kantorovich, an executive at crypto firm FalconX.
“Everyone has had a good year, and with this player coming from traditional finance, they have their eye on the macro environment which currently looks shaky,” she added.
Other reasons for the recent events include the US Federal Reserve tapering news, as well as a brand new COVID-19 variant. Nevertheless, Kantorovich is predicting a bright future for BTC. “Across our desk we are seeing a lot of OTC with primarily buyers coming in to take long exposure,” she said.
Institutional selling was one of the triggers for the recent dump – one company has even sold $500 million (~£376 million) worth of Bitcoin. This caused Bitcoin to plunge below $43,000 overnight.
Subscribe to our daily and weekly newsletter service to receive a digest of the latest news in the cryptosphere and never miss out on any of the Cointribune's highlights!
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
|BITCOIN (BTCUSD) ₿||$29,318.47||-0.35%|
|ETHEREUM (ETHUSD) Ξ||$1,969.13||-0.21%|
|IMM. US (REIT)||$2,463.96||0.79%|
Receive the latest and best crypto news directly to your inbox et tentez de gagner 0.2 ETH en vous inscrivant aujourd'hui