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Home»News»Cryptocurrency News»Bitcoin plunges 20%: digital currency crashes across the board

Bitcoin plunges 20%: digital currency crashes across the board

Cryptocurrency News December 5, 2021
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Bitcoin plunges 20%: digital currency crashes across the board
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On December 4, Bitcoin plunged sharply, as low as $42587.8, a drop of 20.59%. Although there has been a rebound since then, it also fell by more than 10% that day.

As of press time, the price of Bitcoin is approximately $49,176. Compared with the historical high of $6,8990.6 on November 10, the decline is close to 30%.

Ethereum reported about US$4079.2 per coin, down 16% during the session. In addition, as of now, EOS has fallen by more than 18%, Cardano has fallen by more than 8%, FIL has fallen by 17.45%, Monero has fallen by more than 8%, and Dogecoin has fallen by more than 10%.

According to data, as of 8:00 pm on December 4, a total of 417,000 people have liquidated their positions in the past 24 hours, and the total amount of digital currency contracts on the entire network has reached US$2.584 billion. Among them, the liquidation amount of Bitcoin within 24 hours alone exceeds 1 billion US dollars.

Excessive market leverage may be the main reason for the flash crash

Since the record high on November 10th, the price of Bitcoin has continued to fall. Especially in December, the price of Bitcoin accelerated its decline.

On December 3, Bitcoin fell by more than 5%, reaching a minimum of US$52008.9. On December 4, Bitcoin continued its downward trend, falling below the $50,000 mark in one fell swoop, as low as $42,587. The biggest drop in the day was more than $10,000, the lowest price since September 30.

Some institutional analysts believe that excessive market leverage may be the main reason for this Bitcoin flash crash. Data tracked by Coinglass shows that the liquidation of nearly $600 million in open Bitcoin futures positions was triggered within less than an hour of the Bitcoin price crash. A recent report issued by the Arcane Research Corporation pointed out that for more than a month, the open position of Bitcoin futures contracts has remained above 365,000 lots. It is not common for open positions to remain high for a long time and may indicate that the market is too leveraged.

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