Bitcoin, Ether Dive As Virus Variant Boosts Wider Global Sell | Crypto News

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Bitcoin fell 9% to $ 53,552 while ether fell more than 12% on Friday.

Bitcoin has fallen 20% from the all-time high earlier this month as a potentially disturbing new variant of the coronavirus has prompted traders to ditch risky assets across the globe.

The world’s largest cryptocurrency fell 9% to $ 53,552 on Friday. Ether, the second largest digital currency, fell more than 12%, while the larger Bloomberg Galaxy Crypto index fell to 7.7%.

A new variant identified in southern Africa sparked sell-offs in global markets, with European stocks falling the most since July and US stock indices also falling early in the session. Bitcoin has not been spared the carnage despite being viewed by many crypto enthusiasts as a hedge against financial market turmoil.

“For us, it’s still, overall, a risky asset,” said Ross Mayfield, investment strategy analyst at Baird. “When things get a little scary, there will be salespeople. “

Meanwhile, gold – a traditional safe haven asset – climbed 1.33% on Friday morning, although the precious metal has still significantly underperformed Bitcoin since the start of the year.

“I think the role that Bitcoin will ultimately play is still uncertain. The role that something like gold and treasury bills play is pretty well known at this point. So the bottom line is that when things look really bad, traditional shelters rise to the top, ”Mayfield added.

The new variants that rocked the markets weren’t the only negative factor weighing on Bitcoin. Earlier this week, analysts cited a number of crypto hurdles, including U.S. tax reporting requirements for digital currencies, the intensification of China’s regulatory crackdown, and India’s views on a new bill that could ban most private cryptocurrencies.

Bitcoin has been under pressure since hitting a record high of nearly $ 69,000 earlier this month due to excitement over America’s first exchange-traded fund linked to digital asset futures. It is currently near its 100-day moving average of $ 53,940, which served as support during its decline in late September.

“Ironically, yesterday afternoon the crypto markets started looking rather bullish with hopes of a Santa rally,” said Jonathan Cheesman, head of OTC and institutional sales at the exchange. FTX crypto derivatives, in a note Friday. It will be “a nervous weekend for sure”.

As always, bulls remain convinced that more institutions and retail investors will embrace virtual currencies.

“This is a market reaction / correction in an uptrend,” said Vijay Ayyar, Asia-Pacific manager at Luno Pte., Who pointed out that options expiration days – like Friday – can often be volatile. He said that a fall in the $ 48,000 to $ 50,000 range could be of more concern, and that “20% declines are normal in an uptrend in Bitcoin, as we have seen from many. times previously “.

Katie Stockton, founder of Fairlead Strategies LLC, said in a note Friday that two consecutive daily close below the $ 52,900 level would increase the risk of a deeper pullback to the next support level near $ 44,200. But that’s no reason to sell, she says.

“We would stay long, for now, given the likelihood of a rebound in the coming days into oversold territory, noting that medium-term momentum remains on the upside,” Stockton said.

For now, the Bitcoin pullback is a secondary manifestation of the global market decline on the new variant identified as B.1.1.529 as policymakers rush to revamp cross-border travel policies.

The biggest token is still up over 85% this year.

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