The extreme volatility that hit the crypto industry in late November was exacerbated by massive liquidations in the futures market. Bitcoin plunged from a high of $ 59,000 to $ 45,000 over the weekend, according to data from Glassnode, sending the market down as much as 35% from its all-time high in early November.

New virus variation and Fed rumors are pushing Bitcoin deep into the red

After rallying to $ 60,000, Bitcoin collapsed last week as the market plunged into the red. Not only the crypto industry, but also the global financial markets are badly affected as share prices collapse on the stock exchanges.

A driving force for the rest of the crypto market, Bitcoin tumbled as low as $ 45,000 on Sunday after climbing to a high of $ 59,000. In early November, the price fell 35% against ATH, dragging the rest of the market down, with most cryptocurrencies posting significant losses.

Open, upper, lower price, price close (OHLC) of Bitcoin | Source: Glassnode

Panic selling created extreme volatility as traders tried to stay one step ahead of the market. Last week, Federal Reserve Chairman Jerome Powell announced that the central bank was considering slowing its monthly bond purchases, a move that could allow the Fed to hike rates as early as the spring of next year.

This has fueled the fire amid the coronavirus outbreak. The sell-off triggered by rumors was exacerbated by massive liquidations on the futures market. According to data from Glassnode, the top level Open Interest (OI) in the Bitcoin futures market has laid a solid foundation for the highly volatile event. With leg market weakness dragging all assets down, selling pressures on Bitcoin resulted in a series of lengthy liquidations.

Walid Koudmani, market analyst at finance broker 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.”

Regarding the open interest of Bitcoin futures, contracts worth over $ 5.4 billion have been wiped out, removing 24.5 percent of the total value from the space.

Bitcoin Futures Open Interest on all exchanges from November 27th/2021 to December 5, 2021 | Source: Glassnode

“The situation looks pretty volatile today as BTC trades at around $ 47,000 and investors focus on the news to determine the severity of the problem,” added Koudmani.

However, not everything is as bleak as the charts show. On-chain data seems to confirm the predictions of many analysts. Most of them believe that the losses set the ground. Koudmani noted that while Bitcoin’s dominance has hit its lowest point in recent months, it isn’t necessarily a sign of a bear market.

“One thing to note is that despite the widespread drop in prices, the ETH / BTC chart shows that a significant portion of the money goes into ETH, not BTC.”

It is also important to note that most of the tokens sold on the spot market went to new investors. Glassnode has reported that 97% of Bitcoin supply has not been spent over 3 months since its all-time high and recent pull-out.

communication conclude In the latest report:

“Overall, this means great confidence, despite extreme volatility and losses. The exact opposite of this week’s price campaign. “

WOMENDelivery of Bitcoin in 2021 | Source: Glassnode

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