The liquidations in the amount of $ 2,18 billion and a decrease in the interest of institutions in the first cryptocurrency

​The fall of the bitcoin exchange rate and the review of the key events. Summing up the interim results of the week

07.12.2021 - 08:30


4 min

The current week has not been the best for the bitcoin fans. Thus, over the past seven days, the asset has lost more than 9% and is currently trading at around $51 220. The second most capitalized cryptocurrency, Ethereum, showed a moderate decline of 6,09%.

The three leaders in the growth of the exchange rate included such projects as Matic (+38%), LUNA (+29,8%), and OCB (+11,84%). As for the outsiders, IMX (-34,59%), QTUM (-29,30%) and FIL (-27,06%) showed the largest drop.

The total capitalization of the crypto market fell from $2,617 trillion to $2,382 trillion in 7 days with bitcoin dominating at 40,6%. As can be seen on the infographic of the Coin360 portal, the overall market backdrop is in the red zone.

Source: Coin360

A flurry of liquidations on the crypto market

According to a report from the Glassnode analytics firm, the fall in the bitcoin exchange rate and subsequent sell-off became the third-largest in 2021. The realized loss was recorded at $2,18 billion, surpassing that of the so-called “Black Thursday” in March 2020, when losses amounted to $1,38 billion.

Source: Glassnode

After reaching a high of $59 041, bitcoin dropped to $45 032 on Saturday. One of the main reasons for the fall in the exchange rate was the US Federal Reserve System’s policy of shortening the economy's stimulus period. In addition, the rapid spread of the new omicron strain had a significant impact. The sellings on the spot market led to a decrease in the rates of cryptocurrencies and then triggered huge stop losses on the derivatives markets.

The institutional traders reduced their bitcoin positions by $500 million on Friday, December 3. In total, more than 1,3 billion long positions ranging from $42 000 to $51 000 were liquidated. The volume of open interest dropped from $21,6 billion to $16,7 billion in less than an hour.

Louis Navellier, a well-known investor, supported the market's downbeat mood and predicted a further drop in the exchange rate to as low as $10 000 per bitcoin. According to the billionaire, the cryptocurrency bubble will burst the Fed's fight against inflation. At the same time, a return to $10 000 will be “one of the many 80% pullbacks in bitcoin's rich history.”

The falling exchange rate situation has played into the hands of large buyers of cryptocurrency. Thus, El Salvador's President Nayib Bukele has replenished the state fund with another 150 BTC. The government currently has 1270 coins at its disposal.

Recall that the Microstrategy fund also bought an additional 7002 coins at the end of November. To date, it has 121 044 BTC at its disposal with an average purchase price of $29 534. The founder of the fund, Michael Saylor, stressed that he does not see bitcoin as a currency, but as a global reserve asset. In the entrepreneur's view, recognizing bitcoin as a property will allow it to develop and scale without fear of regulatory pressure.

What events took place in Russia?

One of the main news in the Russian market was the central bank's refusal to provide services related to cryptocurrencies. The Bank of Russia opposed the use of digital assets as a currency for settlements because they are not backed by the state. Earlier, the President of the country, Vladimir Putin, also spoke about the risks of using cryptocurrencies, while not ruling out that there may be a future for this type of asset.

Another important news was a report about attempts to block the Tor browser in Russia. According to the users, the attack on the anonymous Internet segment is being carried out by Rospotrebnadzor (The Federal Service for the Oversight of Consumer Protection and Welfare) with the help of the TSPU equipment to the default public servers. The blocking mainly affected users from Moscow, the customers of the Beeline, MegaFon, Yota, and MTS networks.


Michael Golikov Michael Golikov

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