After a weekend turmoil which hit the crypto market with a sharp and sudden plunge, Bitcoin rose 1.5 percent in early Asia on Tuesday, but many crypto traders remained on edge.
The crypto fell as much as 22 percent to just under $42,000 on Saturday on a combination of profit-taking and macro-economic concerns, however, it bounced back later in the session with thin weekend liquidity exacerbating price moves.
It was the biggest crash since a 31 percent collapse in bitcoin’s price on May 19. Bitcoin’s market capitalisation has fallen to about $932 billion from $1.25 trillion on Oct. 21, according to cryptocurrency analytics platform Coinglass.
The world’s largest cryptocurrency was last around $50,800, having closed a choppy day on Monday at 2.2 per cent higher.
“The general confidence in crypto is still high and market sentiment is coming back as we saw a general risk-on mood on Monday. Omicron’s effect looks a lot milder than the market has digested,” said Edison Pun, senior market analyst at Saxo Markets in Hong Kong.
As such, cryptocurrency analysts have still no idea about the reason that triggered the heavy selling, while pointing to a plunge in margin borrowing and in fresh futures positions, as well as to activity by large holders of bitcoin as evidence of mass liquidation.
While Bitcoin set a new record high of $69,000 on Nov. 10, Ether, the world’s second largest cryptocurrency, was last down 0.3 percent to $4,340.