Bitcoin rose 1.5 percent in early Asia on Tuesday after firming overnight in line with equity markets and other risk assets, but many crypto traders remained on edge following Saturday’s sharp and sudden drop.
After a rocky day, the world’s largest cryptocurrency was last trading around $50,800, up 2.2 percent on Monday.
“As indicated by Monday’s broad risk-on mentality, general belief in bitcoin is high, and market sentiment is increasing.” “Omicron’s impact appears to be much milder than the market has taken in,” said Edison Pun, a senior market analyst at Saxo Markets in Hong Kong.
Due to profit-taking and macroeconomic concerns, Bitcoin plummeted as much as 22% to little under $42,000 on Saturday, but it recovered considerably later in the session, with poor weekend liquidity amplifying price fluctuations.
Analysts were perplexed as to what had sparked such a large sell-off. However, they noted evidence of huge liquidation in the form of a decline in margin borrowing and new futures positions, as well as action by significant bitcoin holders.
That was the greatest decrease since the price of bitcoin fell by 31% on May 19. According to cryptocurrency monitoring company Coinglass, Bitcoin’s market valuation has plummeted to about $932 billion from $1.25 trillion on Oct. 21.
Bitcoin hit a new all-time high of $69,000 on November 10.
At the time of writing, Ether, the world’s second-largest cryptocurrency, was down 0.3 percent to $4,340.
Ether was trading at 0.085 bitcoin per coin, down from a near four-year high on Monday.