[Bitcoin Now] Staying in the 60 Million Won Range... Investment Sentiment Also 'Hesitant'

Cryptocurrency Plummets Over the Weekend... Forced Liquidation of Derivatives Trades Occurs
Cryptocurrency Market More Unstable Amid Omicron and Interest Rate Hike Uncertainties

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin remained in the 60 million KRW range. It plunged to 56 million KRW over the weekend and then rebounded, but is showing signs of weakness again. As a result, the investment sentiment among cryptocurrency investors is also shrinking.

According to the domestic cryptocurrency exchange Upbit, as of 11:35 AM on the 6th, Bitcoin recorded 60.75 million KRW, down 1.82% compared to the previous day. It rose to 62 million KRW at 9:01 AM that day but has been falling since.

Cryptocurrencies crashed over the weekend. Bitcoin, which was in the 70 million KRW range on the 4th, recorded 56 million KRW, down 20.63% compared to the previous day during the session. Other cryptocurrencies showed similar trends. On the previous day, non-fungible token (NFT)-related cryptocurrencies Sandbox, Bora, and PlayDapp fell by 11.65%, 11.86%, and 15.31%, respectively.

Furthermore, as cryptocurrencies plummeted, the market is stagnating. According to the cryptocurrency market tracking site CoinMarketCap, Upbit’s 24-hour trading volume recorded 5.9 billion USD (approximately 6.985 trillion KRW) that day. On the 4th, Upbit’s 24-hour trading volume reached 12.53369 billion USD. Other cryptocurrency exchanges showed similar trends. Bithumb, Coinone, and Korbit also saw their trading volumes reduced to about half compared to the 4th.

The sluggishness in the cryptocurrency market is presumed to be due to the selling pressure of Bitcoin in the derivatives market. According to cryptocurrency specialized media Cointelegraph on the 5th (local time), during Bitcoin’s crash, forced liquidations of derivatives trades worth 2.5 billion USD occurred. Cryptocurrency investors had bet on a rise using high leverage, but as Bitcoin’s spot price suddenly dropped, futures contracts were forcibly liquidated.

On the 6th, as the government announced its stance to focus quarantine capabilities on responding to Omicron until the end of the year and requested cooperation regarding the quarantine pass, office workers wearing masks are using the train at Sindorim Station in Guro-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

The new COVID-19 variant virus ‘Omicron’ and uncertainties related to the US interest rate hikes are expected to further destabilize the cryptocurrency market. According to CNN on the 5th, the US major investment bank Goldman Sachs lowered its forecast for the US annual GDP growth rate next year from 4.2% to 3.6%, citing Omicron risks.

Additionally, Jerome Powell, Chair of the US Federal Reserve (Fed), has turned hawkish by suggesting the possibility of an early end to asset purchase tapering and hinting at interest rate hikes. Being hawkish refers to a tendency to prefer tightening policies such as interest rate hikes when signs of economic overheating appear.