# Bitcoin’s flash crash crimps year-end bulls
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-12-06
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: Bitcoin crash shakes crypto market: what caused the flash
Meta Description: Flash weekend crash of bitcoin impacts investor sentiment, with significant losses and uncertainty looming in the cryptocurrency market.
URL: https://financedigest.com/bitcoins-flash-crash-crimps-year-end-bullshtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-12-06t162228z2lynxmpehb50p3rtroptp4fintech-cryptocurrency-1736836710707-compressed.jpg)

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – A flash weekend bitcoin crash that wiped out a fifth of its value and caused $2 billion worth of positions to be liquidated has soured investor expectations of a massive run-up in the world’s largest cryptocurrency into the year-end.

Cryptocurrency analysts were not quite sure what triggered the heavy selling, but pointed to the a plunge in margin borrowing, in fresh futures positions and to activity by large holders of bitcoin as evidence of mass liquidation.

Bitcoin fell as far as $41,967.5, levels that made it 40% cheaper than the Nov. 10 record of $69,000. By Monday, it was back above $47,000, with a lot of investors still nursing wounds.

Q4 will be a hard month, the prospect of [hitting $100,000 as a lot of people were hinting at due to various round numbers](https://www.financedigest.com/australia-covid-numbers-hit-a-peak-as-omicron-outbreak-strains-domestic-politics.html "Australia COVID numbers hit a peak as Omicron outbreak strains domestic politics"), technical analysis, that’s out of reach now,” said Matt Dibb at Stackfunds, a Singapore-based crypto fund distributor.

Our view is will be neutral-to-bearish over the [short term](https://www.financedigest.com/ifrs-15-moving-away-from-short-term-fixes-is-vital-for-effective-compliance.html "IFRS 15: Moving away from short-term fixes is vital for effective compliance"). And recalibrate.”

While the cryptocurrency world is no stranger to volatility, Saturday’s crash was the [biggest since a 31% collapse in bitcoin’s](https://www.financedigest.com/dollar-retreats-headed-for-biggest-weekly-loss-since-mid-january-bitcoin-down.html "Dollar retreats, headed for biggest weekly loss since mid-January; bitcoin down") price on May 19. According to cryptocurrency [analytics platform](https://www.financedigest.com/lending-stream-builds-leading-edge-credit-platform-with-fico-analytic-software.html "Lending Stream Builds Leading-Edge Credit Platform with FICO Analytic Software") Coinglass, bitcoin’s market capitalisation has fallen to about $931 billion from $1.25 trillion on Oct. 21.

Saturday also [saw diehard bulls and the dip-buying investors](https://www.financedigest.com/stocks-with-greater-socially-responsible-investor-demand-saw-weaker-losses-during-the-covid-19-crash.html "Stocks with greater socially responsible investor demand saw weaker losses during the COVID-19 crash") make a play.

According to another [analytics platform](https://www.financedigest.com/ravenpack-opens-its-big-data-analytics-platform-to-fundamental-investors.html "RavenPack Opens Its Big Data Analytics Platform to Fundamental Investors"), CryptoQuant, bitcoin’s Korea premium index, or what is often referred to as the kimchi premium, hit 7.72. That index, which measures [bitcoin’s price](https://www.financedigest.com/bitcoin-price-rises-past-50000-as-rebound-continues.html "Bitcoin price rises past ,000 as rebound continues") gap between South Korean exchanges and other exchanges and shows how strong bids in that risk-loving population are, was negative a month back.

El Salvador President Nayib Bukele said the Central American country had acquired https://www.reuters.com/markets/us/bukele-steps-up-el-salvadors-bet-sliding-bitcoin-buys-another-150-coins-2021-12-05 an [additional 150 bitcoins](https://www.financedigest.com/coinsource-launches-new-bitcoin-atm-software-readies-for-global-expansion-and-future-token-additions.html "Coinsource Launches New Bitcoin ATM Software; Readies For Global Expansion and Future Token Additions"), on top of the 100 it bought a week earlier.

TOKENS AND BLOCKS

Other popular [tokens including second-biggest cryptocurrency](https://www.financedigest.com/streamrs-data-token-now-listed-on-leading-cryptocurrency-exchange-binance.html "Streamr’s DATA Token Now Listed on Leading Cryptocurrency Exchange, Binance") ether and solana were dragged down, last trading down 3.6% and 7.6% respectively. Both have significantly outpaced [bitcoin’s gains over the past year](https://www.financedigest.com/cryptoverse-bitcoin-digs-in-for-a-bumpy-new-year.html "Cryptoverse: Bitcoin digs in for a bumpy new year").

The [total](https://www.financedigest.com/the-cervical-total-disc-replacement-market-to-grow-based-on-customized-digitization.html "The Cervical Total Disc Replacement Market to grow based on customized digitization") market capitalisation of the cryptocurrency market now stands at $2.35 trillion according to CoinGecko, down after topping $3 trillion last month.

The slow wider adoption of digital assets has, however, not been interrupted by bitcoin gyrations or broader [concerns about global](https://www.financedigest.com/oil-prices-steady-on-uncertain-global-outlook-and-supply-concerns.html "Oil prices steady on uncertain global outlook and supply concerns") policy tightening. Regal cinemas, operated by Cineworld, and AMC Entertainment last month [announced partnerships](https://www.financedigest.com/adverty-and-yazle-announce-exclusive-in-game-ad-partnership-in-mena-region.html "Adverty and Yazle announce exclusive in-game ad partnership in MENA region") with digital wallet companies for accepting cryptocurrencies for buying tickets and popcorn.

Jack Dorsey-led [payments giant Square’s rebranding as “Block” also demonstrated more companies’ willingness to board the blockchain](https://www.financedigest.com/why-blockchain-could-represent-the-future-of-cross-border-payments.html "Why blockchain could represent the future of cross-border payments") train.

Cryptocurrency fans and detractors alike will closely eye testimony from the top executives of eight major cryptocurrency firms, including [Coinbase Global chief](https://www.financedigest.com/crypto-firms-will-develop-offshore-without-clear-us-rules-coinbase-chief-says.html "Crypto firms will develop ‘offshore’ without clear US rules, Coinbase chief says") financial officer Alesia Haas and FTX Trading CEO Sam Bankman-Fried, to the U.S. [House Financial Services Committee](https://www.financedigest.com/us-house-committee-chair-concerned-by-tesla-deals-in-china.html "US House committee chair ‘concerned’ by Tesla deals in China") on Dec. 8.

One particular area of focus for regulators is “stablecoins”, which are digital [currencies whose values are pegged to a traditional asset such as the dollar](https://www.financedigest.com/worst-not-over-for-em-currencies-as-u-s-dollar-thunders-on-reuters-poll.html "Worst not over for EM currencies as U.S. dollar thunders on: Reuters poll"). Stablecoins are used to facilitate [trading in other cryptocurrencies](https://www.financedigest.com/why-cryptocurrency-trading-will-surpass-forex-trading-in-2023.html "Why Cryptocurrency trading will surpass Forex Trading in 2023").

Tether, the biggest stablecoin with a [market cap of more than $75 billion](https://www.financedigest.com/b2b-telecommunication-market-to-more-than-us-27-billion.html "B2B Telecommunication Market to more than US$ 27 billion"), has come under fire recently over disclosures around its dollar reserves, causing some investors to grow wary.

“If (the U.S. Securities and Exchange Commission) cracks down hard on stablecoins, then algorithmic stablecoins such as TerraUSD will become king,” said Will Hamilton, head of trading and research at [digital asset-focused Trovio Capital Management](https://www.financedigest.com/managing-the-cost-of-digital-transformation-with-saas-optimisation.html "Managing the Cost of Digital Transformation with SaaS Optimisation").

Bitcoin spot trading volumes into Tether decreased for the [third consecutive month](https://www.financedigest.com/sentiment-among-german-exporters-falls-for-third-month-in-a-row-ifo.html "Sentiment among German exporters falls for third month in a row -Ifo") in November, according to data from CryptoCompare, while volume in the second-largest stablecoin, USD Coin, increased 11%.

(Additional reporting by Alun John in [Hong Kong; Editing by Vidya Ranganathan and Alex Richardson)](https://www.financedigest.com/screening-of-winnie-the-pooh-horror-film-cancelled-in-hong-kong.html "Screening of ‘Winnie the Pooh’ horror film cancelled in Hong Kong")


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---