Bitcoin’s three-week-plus period of inactivity has been broken, but in the complete opposite direction hoped for by holders of the world’s largest cryptocurrency.
In one of the worst daily trading session in nine months, BTC/USDT plummeted over 7% to close Thursday at a two-month low of US$26,600.
The pair actually dipped below US$25,200 briefly, until buyers saw an opportunity to snap up a discount.
Bitcoin prices have stabilised somewhat this morning, with the BTC/USDT pair hovering around the US$26,500 price point.
Bitcoin crashes below support levels – Source: currency.com
Liquidations piled up alongside plummeting spot prices, with nearly US$400 million in long-bitcoin positions on the futures market getting wiped out.
Though macroeconomic pressures persist, the sharp plunge after weeks of thin trading was spurred on by a Wall Street Journal report into Elon Musks’s SpaceX’s finances.
The report explained how SpaceX has capitulated on its bitcoin holdings after writing down US$373 million in losses in 2022.
Musk and his various ventures are known to exert influence over cryptocurrency prices, though broader issues around global inflation, China’s economic turmoil and a low appetite for risk assets have also contributed to bitcoin’s poor performance.
Bitcoin dominance took a hit overnight, falling from over 50.5% to 49.5% at the time of writing. Dominance measures bitcoin’s market capitalisation as a percentage of the global cryptocurrency market, and is considered a valuable metric to determine current bitcoin sentiment.
Given the recent turmoil, the Crypto Fear & Greed Index, which measures bitcoin’s dominance, volatility and market momentum, has fallen to the lowest point in six months, with the gauge firmly in the fear zone at 37.
Prices across the broader altcoin space have also taken a hit.
Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, was sent 7% lower overnight, with the ETH/USDT pair currently swapping for US$1,690.
Among the worst week-on-week performers in the top-20 set are Ripple (XRP), which is down nearly 20%, Dogecoin (DOGE), which is down nearly 18%, and Polygon (MATIC), which is down more than 15%.
Shiba Inu (SHIB) and Litecoin (LTC) have also suffered losses in the high teens.
Global cryptocurrency market cap currently stands at US$1.06 trillion, having dipped 6.3% overnight.