During the last 24 hours, the crypto economy has lost 8% in value as a great number of crypto asset prices dropped significantly during the overnight trading sessions. Crypto markets lost more than $ 22 billion in value, with the major digital currencies in the top 20 losing between 6% and 20%.
Global Markets Lurch in Fear Over B.1.1.529 Variant
Global markets are shaken today as headlines declare that a new Covid-19 variant called B.1.1.529 is spreading beyond South Africa where it was discovered. The B.1.1.529 variant is said to be more contagious than the Delta variant and has around 30 mutations. As soon as the headlines broke, markets in nearly every nation worldwide started to tank, and investments tied to the oil and gas sector dive-bombed. For example, the international benchmark for a barrel of Brent crude fell 5.3%.
On Friday, the economist and bitcoin advocate Alex Krüger tweeted about how the new variant has roiled global markets. “Global markets were scared today by this new variant of Covid”, Krüger noted. “Big movements in world markets. Growth stocks trashed, crude oil lower, rates down, rotation back to tech. Traders’ pricing in higher odds of renewed lockdowns on low liquidity conditions. It’s OK, no Covid in the metaverse,” the economist added.
$ 22 Billion Worth Leaves Crypto Economy, Leading To Accumulation Of ‘Downtrend Moment’
The crypto economy lost 8% in value during Thursday night sessions and Friday morning trading sessions. At 11:00 p.m. (EST) on Thursday, bitcoin (BTC) was swapping for over $58K per unit but by Friday morning, BTC changed hands for just over $54K per unit. Bitcoin is down 7.9% in the last 24 hours and its market cap is just above the $ 1,000 billion mark. Ethereum (ETH) has lost 9.4% in the last day and each ether changes hands for just over $ 4,000 per unit on Friday.
The 11,000+ crypto coins in existence lost more than $22 billion in value and there’s around $200 billion in global trade volume today. Stablecoin trades command more than half of the recorded volume with $115.1 billion in 24-hour stablecoin trade volume. On Friday, Du Jun from Huobi Global shared some market insights tied to bitcoin’s (BTC) current state.
“According to data from Huobi Global, BTC has continued to decline since the morning, and its momentum increased sharply in the afternoon, and it quickly fell to 54,500,” the Huobi Global analyst said. “The daily decline has passed 4,000, and it continues to decline. The current position broke the low point of 55500 in the last bearish cycle. From a long-term perspective, the downward trend in BTC prices has not changed and a new round of downward adjustments has arrived, ”the analyst added. Du Jun’s market outlook further noted:
Judging from the 4h k-line, the transaction volume increased sharply, which intensified the changes in bitcoin’s price. The price crossed to the lower rail of the Bollinger Band, EMA lines turned down, and DIF crossed DEA downward significantly, which formed a sell signal. It can be expected that the downtrend will weaken and even adjust horizontally in the short term, but the long-term downtrend remains unchanged. From the daily perspective, today’s bitcoin price jumped out of the horizontal adjustment in the past week, and formed a clear linear response to the downtrend one week ago, which means that the adjustment of bitcoin’s price last week is only accumulating the downtrend momentum. In the short term, pay attention to the magnitude of the price correction.
Institutional and coronavirus fears
Alex Kuptsikevich, senior market analyst at Fxpro, also spoke about how the swerving global markets put pressure on crypto markets. “Due to the institutional love affair, bitcoin is significantly vulnerable to times when exiting risky assets when it sells everything, regardless of the outlook,” Kuptsikevich explained to Bitcoin.com News in a note from market update sent on Friday. “[Bitcoin’s] serious selling risks drag all of the cryptocurrency with it. From a different perspective, retail investors have developed a crypto buying reflex over coronavirus fears, with the WHO discussing new virus variants and restrictions on air travel, ”Kuptsikevich added. The Fxpro analyst concluded:
This means that real crypto-enthusiasts and long-term investors in cryptos may consider buying it out of the severe downturn on the exit of traditional financial institutions.
