Bitcoin, the world’s largest cryptocurrency by market value, lost nearly $3K as it traded at its $48K support level, a level some analysts view as crucial for gauging its outlook for 2022.
Losses due to liquidations at the crypto market exceeded $370 million at the time of writing this report.
Nearly 80% of these liquidations occurred on long positions, which are futures contracts in which traders bet on a price rise.
For the day 129,644 traders were liquidated at the Crypto futures market. The largest single liquidation order happened on Bybit, valued at $5 million.
Bitcoin declined as much as 4.5% on Tuesday and was trading at about $48.5k at about 6pm West African time. Ether, the world’s leading altcoin by market value was also in the red, with each falling more than 3%.
Smaller tokens, such as Solana, Cardano, Polkadot, and meme token Dogecoin, also dropped Tuesday, according to FTX Exchange.
Crypto investors including whales have been retreating from speculative markets of late, worried that the central banks’ stimulus program is ebbing.
The extent to which Bitcoin and the wider crypto universe are exposed to this risk is a hotly debated issue.
Historically, bitcoin prices have tracked the price of riskier assets such as US stocks. However, that trend is starting to shift this month. Since the start of December, the S&P 500 index of the largest companies is up about 5%, while bitcoin is down about 10%.