Early Saturday morning, the price of the world’s top crypto coin, Bitcoin, plummeted by $9,000. The digital gold’s value dropped nearly $10,000, hitting a temporary low of $42,000 within an hour. The digital asset, however, bounced back up to $45,000.
Over the past 24 hours, Bitcoin’s value has decreased by $15,000. According to CoinMarketCap, at the time of writing, BTC is trading at $47,628.24, a 15.73% drop within 24 hours.
Around the same period, the world’s second-largest crypto coin, Ethereum, also had a price drop. The cryptocurrency’s value dropped by $1,100. At the time of writing, Ethereum is trading at $3944.16, a 13.59% decrease within 24 hours.
These devastating performances by the world’s leading crypto coins are a reflection of the overall performance of the crypto market. According to CoinGecko, the crypto market capitalization is around $2 trillion as a result of the huge drop.
According to the price index by CoinDesk, some cryptocurrencies experienced a drop of more than 20% over the last 24 hours. As per the price index, the crypto coins began experiencing a decline in value from Saturday around 04:00 UTC.
The Overall Decline in Bitcoin and the Crypto Market Performance
Spot market selling seems to have triggered the decline in the overall performance of the crypto market. Spot market trading, otherwise known as spot trading, refers to the trading of digital assets at their current market rate that is, the spot price.
With spot trading, crypto-asset traders do not take ownership or delivery of digital assets. Spot market seems to have triggered huge losses in derivative markets. Director of CEC Capital and a crypto exchange-traded fund expert, Laurent Kssis, noted this observation.
Laurent also shared that 1,500 BTC was sold in less than a minute at the time of the drop. Moreover, data that Coinglass was tracking shows that the drop in Bitcoin’s prices triggered BTC’s future positions worth nearly $600 million in less than an hour.
The sharp decline in the performance of the crypto market was also affected by the uncertainty resulting after announcing a new variant of COVID-19, the Omicron variant. Additionally, there’s also been more talk of high inflation. All the same, some have taken the opportunity to “buy the dip.”
El Salvador Buys the Dip Yet Again
El Salvador is the only country in the world to make Bitcoin its legal tender alongside the US dollar on September 7. The country had previously purchased BTC coins during dips. The country’s recent purchase come in spite of previous warnings by the International Monetary Fund(IMF).
The IMF previously warned the country against using BTC as its legal, citing the digital coin’s digital stability. Additionally, IMF pointed out risks to financial integrity and consumer protection. Currently, investors have raised concern that the country’s debt will continue to grow and that it won’t reach a deal with the IMF.