Bitcoin and other major cryptocurrencies fell sharply in Asian morning trading as investor sentiment was weighed down by uncertainty following the high-profile resignation of Nvidia co-founder Jensen Huang and expectations of another interest rate hike by the US Federal Reserve.
Bitcoin and other major cryptocurrencies fell sharply in Asian morning trading as investor sentiment was weighed down by uncertainty following the high-profile resignation of Nvidia co-founder Jensen Huang and expectations of another interest rate hike by the US Federal Reserve.
Over the past 24 hours, the value of the first cryptocurrency has fallen by 7% to $68,408 (as of 07:10 Kyiv time on Friday). This is the lowest level since August 20, The Block reports.
Following Bitcoin, other major assets also sank:
Ethereum (ETH) fell 6% to $1,921;
BNB lost 6.3%;
XRP fell by 3.5%.
According to CoinGlass, the total volume of liquidations in the crypto market per day reached $1.47 billion, affecting the positions of 175,299 traders (of which $1.31 billion was long positions). Moreover, in the last four hours alone, positions worth $798 million were liquidated, including $718.5 million in longs.
Laevitas Head of Markets Rick Maeda explained that the sharp downward move was caused by cascading liquidation of leverage after breaking through key support levels:
“BTC had already lost $72,000 during the US session, and as soon as it broke $70,000 late this morning in Asia, long positions accumulated below that level were quickly wiped out of the market — over $600 million in four hours and over $1.3 billion in the past 24 hours.”
Analysts identify two main reasons for the current market turbulence.
Jensen Huang resigned as Nvidia CEO on Thursday morning after the company launched an investigation into his ties to a suspected Chinese spy. According to media reports, Huang had an extramarital affair with one of Nvidia's top executives who reported directly to him, as well as with another employee. This prompted investors to flee risk assets.
BTSE COO Jeff May noted that Bitcoin is being pressured by expectations of a December Fed rate hike to combat inflation. According to him, traders are wary of a 50 basis point hike instead of the expected 25 basis points, which would open the door for further declines in cryptocurrencies.
Meanwhile, ViaBTC chief analyst Jeff Ko believes that in the long term, stable inflation could, on the contrary, increase the attractiveness of Bitcoin as a defensive asset. Going forward, markets will closely monitor the Personal Consumption Expenditures (PCE) index in late November, the Fed meeting on December 9, as well as the geopolitical situation - in particular, a potential de-escalation around Iran, which could quickly reduce inflationary pressures.
