Blue Monday? Bitcoin falls 5% after this weekend’s abuse

Representation of cryptocurrency bitcoin is seen in this illustration taken November 29, 2021. REUTERS / Dado Ruvic / Illustration

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HONG KONG, December 6 – Bitcoin fell almost 5% on Monday when the beginning of the week gave little respite to the world’s largest cryptocurrency after a bruising weekend where it at one point lost over a fifth of its value.

The route sent the price of bitcoin and the amount invested in bitcoin futures back to where they were in early October, before a massive price increase that sent the token to an all-time high of $ 69,000 on November 10.

It was last down 3.9% to $ 47,567.

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Traders said the weekend’s fall was linked to a broad move away from more risky assets in traditional markets over concerns about the Omicron variant of the coronavirus, combined with lower trading liquidity that tends to plague cryptocurrencies on weekends.

“Our expectation is that the rest of Q4 will be a difficult month; we do not see the strength of bitcoin as we generally see after one of these devastating days,” said Matt Dibb of Stackfunds, a Singapore-based cryptocurrency fund distributor.

“Leverage markets have been completely reset, and open interest in leverage markets has been completely reset.”

The crypto-data platform Coinglass showed open interest – the total number of futures contracts held by market participants at the end of the trading day – across all exchanges was last at $ 16.5 billion compared to $ 23.5 billion on Thursday, and as much as $ 27 billion 10 November.


“There is hardly any liquidity on the weekends, so the markets are a little more vulnerable to shock – that and a lot of demand from institutions, and they do not trade over the weekend,” said Joseph Edwards, head of research at crypto brokerage Enigma Securities in London.

Over the weekend, as prices fell, investors who had bought bitcoin on the margin exchanges saw their positions close, leading to a cascade of sales. A number of retail-focused exchanges closed more than $ 2 billion worth of bitcoin positions on Saturday, according to Coinglass.

Some exchanges allow traders to place bets 20 times or more the size of the investment, which means that a small move in the wrong direction can cause exchanges to liquidate customers’ positions when the original investment is gone.

Ben Caselin at the Asia-based crypto exchange AAX said liquidity had dwindled as bitcoin moved from exchanges to offline digital wallets.

Ether, the world’s second largest cryptocurrency, was also hit on Saturday, albeit less severely. However, it fell 5.5% on Monday to $ 3,965, against its highest of $ 4,868 from November 10, but has increased on its larger rival.

On Sunday, one ether rose to as high as 0.086 bitcoin, the highest since May 2018.

On Monday, CME Group Inc (CME.O) will launch ether minifutures, which they hope will allow traders to better manage the risk of trading the coin.

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Reporting by Alun John in Hong Kong and Tom Wilson in London. Edited by Gerry Doyle and Carmel Crimmins

Our standards: Thomson Reuters Trust Principles.

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