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#1 13-12-2021 09:43:15

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3200

Bitcoin crash

Bitcoin crash
Concerns about what is now described as "persistent" inflation or the upcoming actions of central banks have contributed to the search for alternative ways to secure portfolio value. Cryptocurrencies have taken advantage of this trend to gain popularity. The most popular crypto-currency, Bitcoin, dropped $15,000 in two sessions over the first weekend of December. On Saturday morning, its value even dropped by 20% in one hour, which scared all crypto holders. The current context of fears related to the coronavirus, a rise in interest rates more advanced than expected can impact and limit the movements of crypto-currencies. What are the causes of Bitcoin's fall?

Impact of Omicron and monetary policy

A large number of positions were closed during the first weekend of December. The value of contracts fell on Friday from $23 billion to $16.5 billion, the lowest level since early October. But what caused investors to take such action? First, the discovery of the potentially more dangerous Omicron variant with unknown vaccine resistance has caused risk aversion to return to the markets. Second, hawkish comments by Fed Chairman Powell that inflation was no longer transitory and that a faster than expected tapering was possible contributed to risk aversion sentiment. This has affected liquidity conditions and potentially accentuated movements in Bitcoin. A faster than expected rate hike would impact all assets and slow the crypto-currency market.

The crypto-currency market capitalisation has fallen below the $2.2 trillion mark. Source: Coinmarketcap.

Bitmart hack

Bitmart, a crypto-currency platform experienced a massive hack on Saturday. It announced the disappearance of about $150 million in assets but could actually be estimated at $200 million. After further investigation, Peckshield revealed a simultaneous hack of $96 million on Binance Smart Chain (BSC) and $100 million on Ethereum (ETH). 893.8 billion SHIB tokens or about $33.4 million were also stolen as well as Saitama (SAITAMA), Dogelon Mars (ELON) and Akita Inu (AKITA) tokens. In the past, massive hacks in the crypto-currency industry have often led to a drop in crypto prices. Apart from the funds contained in Binance Smart Chain and Ethereum addresses, Bitmart said all other wallets were "secure and unharmed."

A technical point

Bitcoin prices plunged more than 14% over the first weekend of December. Prices are trying to break through the resistance zone at 50806 by taking support from the 48648 support zone. The aforementioned area is the last barrier before resistance at 52627 where the 78.6% Fibonacci retracement of the decline started on 10/05/21 coincides. In case of failure to cross, a return to the 61.8% retracement cannot be excluded. Source : xStation5

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Article by Bénédicte Augé
XTB Market Analyst

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