Hong Kong: After aligning with the stock market and other risky assets overnight, Bitcoin rose 1.5% in early Asian trading on Tuesday, but many cryptocurrency traders remained nervous after Saturday’s sharp and sudden plunge.
The latest closing price of the world’s largest cryptocurrency is about $50,800, and it closed up 2.2% on Monday.
Saxo Markets Senior Market Analyst Edison Pun said: “As we saw general risk appetite on Monday, general confidence in cryptocurrencies is still high, and market sentiment is picking up. The impact of Omicron seems to be milder than the market’s digestion. Many.” In Hong Kong.
The calm on Tuesday was followed by a storm.
Bitcoin fell as much as 22% to just under $42,000 on Saturday on a combination of profit-taking and macro-economic concerns, but rebounded somewhat later in the session, with thin weekend liquidity exacerbating price moves.
Cryptocurrency analysts were not quite sure what triggered the heavy selling. But they pointed to a plunge in margin borrowing and in fresh futures positions, as well as to activity by large holders of bitcoin as evidence of mass liquidation.
That crash was the biggest since a 31% collapse in bitcoin’s price on May 19. According to cryptocurrency analytics platform Coinglass, bitcoin’s market capitalisation has fallen to about $932 billion from $1.25 trillion on Oct. 21.
Bitcoin hit an all-time high of $69,000 on November 10.
Ether, the world’s second largest cryptocurrency, fell 0.3% to US$4,340.
Compared with its larger peers, the price of Ether is 0.085 Bitcoin, just close to Monday’s nearly four-year high.