Bitcoin’s bumpy weekend

Crypto plunges over $1,000 in 30 minutes after breaking $12k

The weekend proved to be eventful for the world’s leading cryptocurrency, with Bitcoin passing $12,000 and then plunging by $1,500 in a matter of minutes.

Having stayed relatively stagnant from mid-June to late-July around $9,000-$9,250. The crypto rally of recent weeks has seen both Bitcoin and Ethereum breakout to multi-month highs, with the latter’s surge powered by increased interest in Decentralised Finance (DeFi) smart contracts.

In early morning Sunday trading (GMT), BTC rose as high as $12,122, its highest level since August 2019. However, within half an hour it had plummeted to $10,638.

While a correction had been expected after Bitcoin’s recent gains, its size and speed will have served as a sharp reminder of the cryptos innate volatility.

It is thought that over 72,000 positions worth almost $1.4bn (£1bn, €1.2bn) were liquidated across leading exchanges as a result of the early-morning plunge.

Movement in the wake of the drop was also bumpy. Almost immediately, BTC jumped above $11,300 before slumping back towards $11,000.

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Ethereum also experienced a significant correction, falling by almost a quarter, from $401 to $356, although it has recovered more ground more quickly than Bitcoin.

The latest pullback could dent the hopes of Bitcoin bulls who have predicted cryptos to continue booming as over-indebted governments attempt to print their way back to growth in the wake of the Covid-19 crisis.

Others may simply chalk the rocky weekend up to Bitcoin’s natural unpredictability. Indeed, compared to the six corrections of over 30 per cent since the last bull market uptrend, Sunday’s 15 per cent drop could be said to have been relatively minor.

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FURTHER READING: Bitcoin breaks $10,000 for the first time since June

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