Bitcoin Prices Bear The Brunt Of Long Liquidations And Geopolitical Tensions
Poor market conditions and trading decisions continue to bring out the volatility in the crypto markets.
The news continues to bring in poor sentiment towards the crypto market. This is the sixth day in a row that has seen the price of Bitcoin continue to decline to its lows seen at the beginning of the month. $37,000 has been a range of support for quite some time and it is hard to imagine what will happen if it drops lower.
The looming disasters of a possible WW3 happening because of the threat Russia is making to invade Ukraine have actually done more harm to the crypto markets than anything said or approved by the Biden administration. These geopolitical issues and financial/crypto market issues have brought up more questions about the state of cryptocurrencies.
A popular case that has been made for Bitcoin is that it is a hedge against inflation but in the face of rapidly rising inflation the price continues to dip just as fast. Cryptocurrencies as a whole were thought of as a way to combat geopolitical instability. This so far has not been the case as we are seeing right now that crypto is getting hammered.
In the grand scheme of things Bitcoin and the entire crypto market is a global operation running every hour of the day and is only $2 trillion. Compared to the $26 trillion in the NYSE, this is a reason too for the much sharper volatility that we see in crypto. Another thing to look at is the people that are investing in both the crypto and stock markets. The smart thing for them to do is treat Bitcoin as a risk asset and based on their assessment of something high risk it will be the first thing they are out of.
The big reason Bitcoin is down again today about 1.5%; however, is that derivatives traders are getting liquidated at an enormous rate. $30 million was liquidated in just one hour this morning. Traders getting in their own way and poor market conditions are giving all the volatility you could have ever wanted as a crypto trader.
