(Cover Chart Courtesy of https://coinmarketcap.com/)
Bitcoin took a nasty tumble overnight from a high of $57,482 all the way down to a low of $42,874 in the last 24 hour period. The price recovered slightly, settling to $47, 381 where it sits at time of writing, just below its 200 day moving average. This resulted in the BTC market cap dropping below $1 trillion to just above $895 billion. The trading volume for the previous 24 hours totaled $62,647,584,922. The current circulating supply of Bitcoin now stands at 18,890,987 BTC.
While it's not the first time BTC suddenly drops in epic fashion, this should present a buying opporunity for BTFD'ers. One such buyer jumped in and bought 150 coins at $48,670 each. El Salvador, the first country in the world to make Bitcoin legal tender, took advantage of the dip, adding the 150 coins to their total which now stands at roughly 700 BTC with a dollar value of about $31 million USD. El Salvador's millenial President Nayib Bukele said in a tweet, "They can never beat you if you buy the dips".
According to a ZeroHedge article, the plunge was accelerated by margin calls against a highly leveraged 'whale'. The term 'whale' is used to describe someone or an entity of extremely high net worth that can affect the price of a commodity higher or lower. In this case, it looks like someone was forced to liquidate their BTC assets in a hurry, sending the entire crypto market cap down 17.5% in the last 24 hours to $2.28 trillion.
Things happening yesterday included a disappointing November payroll which may push FED chair Jerome Powell to announce an accelerated taper at their next FOMC meeting on December 15, followed by rate hikes by next June. Also touching nerves is the Covid19 Omicron variant, which is quickly proving to be no more worse than a mild cold but being pimped as a killer variant. Borders are being closed again and many countries such as Austria and Greece are imposing new lockdowns and restrictions.
A week ago, the stock markets suffered their worst Black Friday in 70 years. Gold, which was over $1860 on November 15 dropped about $80 leading up to Black Friday and closed yesterday at about the same price as the week before, $1782 per ounce. One great thing I've noticed about gold is the formation of a massive 'cup and handle' as shown in the ten year chart below. This is traditionally seen as a very positive sign.
It looks like the markets are now starting to price in future rate hikes as governments are forced to tighten monetary policy to reign in inflation. This will in turn reduce liquidity for risky assets which includes BTC and gold. Bitcoin's share of the market cap in the cryptosphere now stands at 38.68%. We should get a hint of what happens next at the next FOMC meeting on December 15. (Reference links below)
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