Bitcoin and Other cryptocurrencies being super volatile suffers a huge bang after Wallstreet Selloff, it’s record a fall of about 20% which has been its lowest point in previous months. Bitcoin which stands comfortably as the model to other cryptocurrencies with a market value that equates over 48.000 USD, had in a few hours fell to about 42, 000 USD before trying to bounce back affecting the reaction of other cryptocurrencies who most usually react in accordance to Bitcoin, Ether experienced 8% drop in market value, dogecoin, Solana etc were also affected.
The new emergence of Omicron Variant of the Covid-19 might have a hand in what the stock market is experiencing. This clearly shows the relationship between human activities and the stock market.
Bitcoin and other cryptocurrencies are notoriously volatile and often plunge for mysterious reasons. Disquiet in the stock market over the new Omicron variant of Covid-19 and the Federal Reserve’s response to inflation might have played a role. Coupled with new Covid restrictions worldwide triggered by the Omicron variant and travel systems finding a way to recuperate, scientists are once again on their toes to find effective vaccines against Omicron
Noelle Acheson had contributed in his statement that, a possible factor accelerating the bitcoin selloff by Wall Street was the unwinding of heavily leveraged crypto derivatives. Taking in consideration a long sell order that could have triggered margin calls and liquidations for investors.
Leveraged trading of cryptocurrency derivatives has become a huge business for exchanges such as Binance, the world’s largest. Traders use future contracts to bet on the rise or fall of a specific cryptocurrency. To make returns more attractive, they are allowed to make oversize bets with little money. When the price of cryptocurrencies falls precipitously, margin calls force investors to liquidate.
Nayib Bukele, president of El savador in September had adopted bitcoin as a national currency in September, buying a 150 coins for an average of $48,670 each. Had apparently, faced a dip, a wrong time to have bought that much bitcoin. Records say, El Salvador had experienced this before plunging into the stock market after a huge price fall.
Cryptocurrencies move much more than stocks or government-issued currencies. The week was a roller-coaster ride for the stock market, with investors uncertain about the course of the pandemic and inflation. .
They are fears of another economic down side coupled with heightened distress by the Federal Reserve over inflation. Somehow Bitcoin had hit an all-time high on Nov. 9 of $67,802. This looking back brings hope to the stock market even in trying times.