Bitcoin price today falls nearly 5% after battering over the weekend
- As if the weekend was not bad enough, Bitcoin price today kept its downward momentum going, hurting investors even more.
As if the weekend was not bad enough, Bitcoin price today kept its downward momentum going, hurting investors even more. Bitcoin price fell nearly 5% on Monday. Over the weekend, the cryptocurrency had lost as much as fifth of its value. The retreat sent Bitcoin price back to where it was in October. However, it was after then that the massive surge had started in the cryptocurrency, causing it to leap to its all-time high of $69,000, which was on November 10. It has been all downhill ever since - Bitcoin has now fallen by 32%.
Not just Bitcoin, Ether price too had plunged over the weekend, but not as much. Ether, which is the world's second-largest cryptocurrency behind Bitcoin, tumbled 3.1% on Monday to $4,070. To put things in perspective, Ether price was $4,868 on November 10 .
The reason for the retreat over the weekend, according to traders was linked to investors looking to move to safer assets and away from riskier ones due to the surge and massive uncertainty about the Omicron variant of the coronavirus. Another reason, is apart of normal behaviour - cryptocurrencies are plagued by lower trading liquidity at weekends.
"There's barely any liquidity on weekends so markets are slightly more vulnerable to shocks - that and a lot of demand coming from institutionals, and they're not trading 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 margin saw exchanges close their positions, causing a cascade of selling. A range of retail-focused exchanges closed more than $2 billion of long bitcoin positions on Saturday, according to Coinglass.
Some exchanges allow traders to place bets 20 times or more the size of their investment, meaning a small move in the wrong direction can cause exchanges to liquidate clients' positions when their initial investment is gone.
Liquidity had become thin because bitcoin moved off exchanges to offline digital wallets, Reuters quoted Ben Caselin at Asia-based crypto exchange AAX as having said.