The 13th of December will be known as “Bloody Monday” as Bitcoin (BTC) lost its $47,000 supports and altcoin values plunged by up to 25% in a couple of seconds. Analysts soon concluded that Bitcoin’s 8.5 percent drop was clearly relevant to the Federal Open Market Committee (FOMC) meeting, which begins on December 15.
Investors are concerned that the Federal Reserve may begin reducing, which is just a decrease in the Federal Reserve’s bond repurchase program. The rationale is that changing the present monetary policy would have a detrimental effect on risky investments. While such a concept cannot be proven, Bitcoin enjoyed a 67 percent year-to-date gain till December 12. As a result, it stands to reason for investors to make gains in advance of market uncertainty, which might be related to the present dip in the BTC price.
BTC/USD 1 DAY PRICE CHART: SOURCE- COINMARKETCAP.COM
The price of bitcoin has tracked 8.2 percent in the last week, but it has beaten the larger altcoin market. This is in sharp comparison to the earlier 50 days, during which the top cryptocurrency’s market share (supremacy) fell from 47.5 percent to 42 percent. Investors may have just gone to Bitcoin owing to low risk than altcoins.
Tether’s Discount Reach A Low Of 4%
The premium or discount on OKEx Tether (USDT) represents the discrepancy between China-based peer-to-peer (P2P) exchanges and the authorized US dollar currency. Figures greater than 100% suggest an overabundance of interest in bitcoin investing. A 5% discount, on the contrary, generally suggests that there is a lot of selling going on.
The Tether signal reached a low of 96 percent on December 13, which is mildly negative but not worrisome given the 10% reduction in overall cryptocurrency market value. Nevertheless, it has been almost two months since this indicator has topped 100%, indicating a lack of enthusiasm among China-based traders.
The overall liquidations during the 24 hours were $400 million, demonstrating that the December 13 price drop had only a minor influence on investor confidence. More crucially, just $300 million in long-term leverage contracts were forced to be canceled owing to inadequate margins. This sum appears tiny when contrasted to the December 3 crisis, which resulted in the closure of $2.1 billion of leveraged buyers’ holdings.
There Is No Extreme Desire From Bitcoin Bearish
Investors should examine everlasting futures to demonstrate that the crypto market structure was not significantly impacted by the rapid price decline. These contracts feature an embedded rate and often demand a fee every eight hours to balance the risk of the exchange.
A favorable funding rate suggests that longs (buyers) want further leverage. The converse situation arises when shorts (sellers) seek higher leverage, causing the funding rate to fall.
Despite the fact that most cryptocurrencies experienced significant losses on December 13, the broader market structure held up well. If there had been an unusually high demand for short betting on a Bitcoin price decline under $46,000, the continuous futures eight-hour financing would have fallen under 0.05 percent.