Bitcoin enters December at the risk of extreme volatility: analysis
Bitcoin has scarred into December due to the extreme volatility we’ve been experiencing lately. The market is now heading into the last month of the year with heavy losses, but can we see a strong end to 2021? Let’s find out in today’s bitcoin news.
The extreme volatility the crypto industry experienced in late November was compounded by massive liquidations in the futures market and, according to data from Glassnode, BTC fell from a high of $ 59,000 to as high as $ 45,000 over the weekend, increasing the market by 35% from its all-time high earlier in the month. The new COVID-19 variant and the rumors from the Fed have only pushed Bitcoin further into the red.
After rallying to $ 60,000, Bitcoin took a big hit last week when the market was in the red.
The massive blow didn’t really just happen to the crypto industry as global financial markets were hit and stock market share prices plummeted. BTC, a driver for the market, fell as low as $ 45,000 on Sunday after rebounding to as high as $ 59,000, down 35% from the ATH in early November, the rest of the market pulled down, with each cryptocurrency hitting huge losses.
The extreme volatility was caused by panic selling as traders rushed into the market, and last week we saw Fed chief Jerome Powell suggest that the central bank would slow the pace of bond buying this spring. This only adds fuel to the fire sparked by the COVID-19 outbreak. The sell-off was caused by rumors of a market liquidation, and according to Glassnode data, the continued high open interest in the BTC futures market is just the backdrop for highly volatile events. As the weakness of the legacy markets pushed the asset into the water, selling pressures on Bitcoin led to a flurry of liquidations. Walid Koudmani, analyst at XTB, said:
“While the crypto market is known for its volatility and potential for price spikes, the correction that occurred this weekend seems to have shaken market-wide confidence. The situation looks pretty uncertain today as BTC trades at around $ 47,000 and investors focus on the headlines to determine the severity of the problem. ”
Bitcoin got pretty tight in December, but most of the tokens were also given to new investors in the spot markets. Glassnode reports show that 97% of the BTC supply has not been consumed over 3 months. However, if you want to check the value of bitcoin, be sure to check out our bitcoin price calculator on our website.