Bitcoin (BTC) plunged below the $40k psychological and hit levels last seen six months ago. The rest of the market followed suit wiping off the modest gains.
The markets started on the wrong foot, owing to high inflation, coronavirus-related worker and supply crisis, and looming interest rate hikes. January has been brutal and there is no respite in sight.
After posting a double-digit decline on the wee hours of Friday morning, Bitcoin was being traded at $38,813. This isn’t the first time that the cryptocurrency has dipped below the coveted $40k. However, the damaging fall towards $38K was seen on 2nd August 2021.
Bitcoin’s Difficulty, Hash rate Hits ATH
Interestingly, the latest price movement comes at a time when the Bitcoin network’s mining difficulty surged by more than 9% and reach a peak of 26.64 trillion on January 21st. With this, the difficulty figures surpassed the previously established all-time high (ATH) of 25 trillion. Its hash rate also reached a fresh new high on the same day. According to BitInfoCharts, the figures stood at $217.26 exa hash per second. Meaning, Bitcoin’s network has never been more secure. However, the highest ever hash rate had little or no impact on the cryptocurrency’s trajectory which sank below record levels.
As the market turned red, popular gold bug Peter Schiff took Twitter to diss the premier cryptocurrency. He wrote,
Lots of people on Twitter keep reminding me how wrong I've been on #Bitcoin because its price rose so much during the years I claimed it wasn't digital #gold and had no real value or utility. How low does the price of Bitcoin have to fall before I get credit for being right?
— Peter Schiff (@PeterSchiff) January 21, 2022
“Lots of people on Twitter keep reminding me how wrong I’ve been on Bitcoin because its price rose so much during the years I claimed it wasn’t digital gold and had no real value or utility. How low does the price of Bitcoin have to fall before I get credit for being right?”
Altcoins Suffers Bears’ Wrath
In addition to Bitcoin, top altcoins including Ethereum (ETH), Binance Coin (BNB), Cardano (ADA) took a beating as well. ETH slid to $2,884 after falling by over 8%, while BNB suffered almost 10% losses and was down to $431. ADA also posted a 9.07% drop and was currently trading at $1.24.
Other altcoins such as Solana (SOL), XRP, and Terra (LUNA) were down by 7.84%, 6.88%, 4.33% respectively. Memecoins Dogecoin (DOGE) and Shiba Inu Coin (SHIB) did not escape either and lost almost 7% value each.
As per the data provided by the analytics platform, Coinglass, over $372. million worth of cryptocurrencies have been liquidated over the last 4-hours. Seemingly, the long positions accounted for more than 90% of the latest wipeout. Over the past day, almost 184k traders found their positions liquidated.
Talking about the large-scale damage, ‘Black Swan’ author and a Bitcoin critic, Nassim Nicholas Taleb tweeted,
Tonight, some investors in #BTC remind me of a ruined gambler who, standing outside the casino at midnight, just realizes he lost the keys to his car.
— Nassim Nicholas Taleb (@nntaleb) January 21, 2022
“Tonight, some investors in BTC remind me of a ruined gambler who, standing outside the casino at midnight, just realizes he lost the keys to his car.”
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