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Bitcoin Price Falls After Wall Street Selloff

Bitcoin Price Falls After Wall Street Selloff

Bitcoin and other digital token tumbled 16% on Saturday amid a wider plunge of cryptocurrencies as investors withdraw from risky bets following this week’s stock market sell-off and the spread of the omicron coronavirus variant.

The drop in cryptocurrencies came after a volatile week in financial markets. The omicron variant has led countries around the world to restrict travel amid worries that vaccines may not be as effective against the strain.

Jerome Powell; Federal Reserve Chairman indicated earlier this week that the central bank could accelerate the tapering of its pandemic bond-buying program, with inflation looking more persistent than policymakers had believed.

The decline in the cryptouniverse was widespread. Other widely traded cryptocurrencies including Solana, Dogecoin and Shiba Inu coins lost more than a fifth of their value.

Ether, the second-largest cryptocurrency, is also down more than 15%, but is down only 4% as of Saturday evening.

Bitcoin and other cryptocurrencies are notoriously volatile and often sink for mysterious reasons. Stock market unease over the new Omicron version of COVID-19 and the Federal Reserve’s response to inflation may have played a role.

Noel Acheson, Head of Market Insights at Crypto Genesis Global Trading, said another potential factor driving bitcoin sales was the opening up of heavily leveraged crypto derivatives. He pointed to a large sell order that may have triggered a margin call and liquidation for investors.

The bitcoin price was seen on Saturday after El Salvador President Nayib Bukele, whose country adopted bitcoin as the national currency in September, said in a Twitter post that the country bought 150 coins for an average of $48,670 each. Were. “El Salvador Just Bought Dip!” he said. He later wrote that the country “missed the f***ing bottom by 7 minutes,” followed by a laughing emoji.

This is not the first time El Salvador has hit the market after a sharp drop in prices. The interventions have turned a small, impoverished nation into an informal central bank that supports digital currency, much as mainstream central banks intervene in foreign exchange markets to keep currencies stable.

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