Posted on 12/04/21
| News Source: Yahoo Finance
The largest digital token fell as low as $42,296 before paring some of the tumble. It was trading at about $48,300 as of 10:31 a.m. in New York on Saturday, a drop of about 10%. The token has now declined more than 20% from the all-time high of more than $69,000 seen on November 10.
Ether, the second-largest token, fell as much as 17.4% before trimming the retreat to about 4%. The overall crypto sector has shed around a fifth of its value, sliding to $2.2 trillion, according to tracker CoinGecko.
It’s not unheard of for cryptocurrencies, which trade 24/7, to swing wildly on weekends. That’s owing to a few factors, including thinner trading volumes and a market structure that consists of hundreds of disconnected exchanges that in effect are their own islands of liquidity.
“As usual, since crypto traders deploy leverage it results in cascading sell orders and liquidations,” said Antoni Trenchev, co-founder of crypto lender Nexo. “We should find support around $40,000 to $42,000 and then rebound in line for a end-year rally. If that does not hold, we might revisit the July lows of $30,000 to $35,000.”
The swings in cryptocurrencies come amid a volatile period for financial markets. Spiking inflation is forcing central banks to tighten monetary policy, threatening to reduce the liquidity tailwind that lifted a wide range of assets.