Bitcoin price plummets after steep weekend decline

Bitcoin's price is continuing to plummet as the cryptocurrency tries to rebound from the weekend in which its value dropped on the markets.

Bitcoin tumbled almost five per cent on Monday as the start of the week offered little respite to the world’s largest cryptocurrency after a bruising weekend where at one point it lost over a fifth of its value.

The rout sent bitcoin’s price and the amount invested in bitcoin futures back to where they were in early October, before a massive price surge that sent the token to an all-time high of US$69,000 on Nov. 10.

It was last down 3.9 per cent at US$47,567.

Traders said the weekend fall was connected to a broad move away from riskier assets in traditional markets over worries about the Omicron COVID-19 variant, combined with lower trading liquidity that tends to plague cryptocurrencies at weekends.

“Our expectation is the rest of Q4 will be a hard month; we aren’t seeing the strength in bitcoin that we generally see after one of these crushing days,” said Matt Dibb at Stackfunds, a Singapore-based crypto fund distributor

“Leverage markets have been completely reset, and open interest within leverage markets has completely reset.”

Crypto data platform Coinglass showed open interest – the total number of futures contracts held by market participants at the end of the trading day – across all exchanges was last at US$16.5 billion compared with US$23.5 billion on Thursday, and as much as US$27 billion on Nov 10.

“There’s barely any liquidity on weekends so markets are slightly more vulnerable to shocks – that and a lot of demand coming from institutionals, and they’re not trading over the weekend,” said Joseph Edwards, head of research at crypto brokerage Enigma Securities in London.