Why Bitcoin and Ethereum plunged this weekend

Why Bitcoin and Ethereum plunged this weekend

What happened

The cryptocurrency market took a turn for the worst in the middle of the holiday weekend, and most prices are down. There wasn’t much news, but on a long holiday weekend, liquidity may be a little lower than usual, leading prices to swing wildly. As of 3:20 p.m., the value of Bitcoin (BTC 0.70 percent) has dropped 4.4 percent in the last 24 hours. Ethereum (ETH 2.65 percent ) is down 4.2 percent on Sunday, while Dogecoin (DOGE 0.80 percent ) is down 2.6 percent. Around 8:00 p.m., the market began to turn. Saturday night at 10:00 p.m. ET, the stock plummeted until 4:00 a.m. ET. Sunday morning at 8:00 a.m. ET

So what

On Saturday, prices began to decline after UK Prime Minister Boris Johnson warned that financial restrictions against Russian companies should be increased. And the United States appears to agree, as Johnson stated that corporations will not be able to trade in “pounds and dollars.” The market as a whole has been affected in recent weeks by rising tensions around the conflict between Russia and Ukraine, and with crypto trading available 24 hours a day, this is the first location for investors to react. It didn’t help that Opensea, Ethereum’s largest NFT trading marketplace, suffered a hack or phishing attempt that took hundreds of thousands of dollars from users’ crypto wallets, depending on who you ask. Although the problem is still ongoing, it is another another setback for some of the industry’s most well-known ventures. According to coinglass.com, the drop in crypto values led to $208 million in liquidations over the last 24 hours. Bitcoin was the most affected with $80.3 million in liquidations followed by Ethereum at $54.9 million. 

Now what

On weekends, cryptocurrency volatility has been particularly strong, owing to traders’ absence from the market. Furthermore, because it is a holiday weekend in the United States, there may be more absenteeism than usual, adding to the volatility. Investors are selling risky assets as fears of conflict erupt in Eastern Europe, and cryptocurrency is the first place they can withdraw funds, in my opinion. While an armed war does not appear to be likely, markets dislike any type of uncertainty, including financial sanctions. Volatility will continue for cryptocurrencies short-term, but the long-term picture remains the same. Investors should be watching for utility being built on top of blockchain technologies because that’s where the real value will be added long-term. Ethereum is the leader out of these three, which is why it would be my pick to buy on this dip, but like all cryptocurrencies, it will be volatile with the market overall.