Black Weekend for Cryptocurrencies: Bitcoin Price Below $45,000

The price of bitcoin fell on Saturday, dropping nearly $10,000 in about an hour to a temporary low of $42,000, while ethereum, the second-largest cryptocurrency by market capitalization, fell by about $1,100 to $3,800 in the same time frame. The market has since recovered slightly, with bitcoin currently trading above $48,000 and ethereum above $4,000.

According to CoinGecko, the total crypto market capitalization is currently around $2.3 trillion.

Data tracked by Coinglass shows that the price drop triggered the liquidation of nearly $1.79 billion worth of long bitcoin futures positions in less than an hour. Open interest across all futures markets fell from $13.1 billion to $9.3 billion.

– Open interest (OI) denominated in bitcoin has now remained above 365,000 for over a month. It is unusual for such a high OI to be maintained for so long. This could indicate that the market is currently oversaturated with leverage – according to a weekly note from Arcane Research published on Tuesday.

Tether (USDT), the largest stablecoin by market value, recorded a brief spike to $1.025 on Coinbase, temporarily deviating from its usual 1:1 peg with the US dollar. During sharp price declines, traders typically treat stablecoins as a safe haven.

The drop to the lowest market levels since the end of September comes after uncertainties caused by the Omicron variant of Covid-19 and increasing discomfort from the Federal Reserve regarding high inflation. Fed Chairman Jerome Powell removed the word “transitory” from the inflation discussion on Tuesday.

However, some are using this autumn drop as an opportunity to buy the “dip.” Salvadoran President Nayib Bukele announced via Twitter that El Salvador made another purchase of 150 bitcoins at a price of around $48,700.

Amid the cryptocurrency drop this weekend, bitcoin’s market dominance fell to nearly its lowest levels ever. At one point on Saturday, when the entire crypto market was in double-digit negative territory, the market dominance of the first and largest cryptocurrency was only 38.32 percent.

The only time it fell this low this year was in May, when it reached 37.76 percent, according to CoinGecko data. And that is not far from the lowest dominance ever, in May 2018, when it briefly touched 33 percent.

Ethereum’s market dominance has actually increased in recent weeks, especially since the drop over the weekend. The latest data from CoinGecko shows that ethereum’s dominance on Saturday was 20 percent, the highest since 2018. At the time of writing, it is even higher, hovering around 20.6 percent.

Earlier this year, in March, it was as low as 11 percent. The ethereum community has long been talking about the “flippening,” the moment when ethereum surpasses bitcoin and becomes the most valuable cryptocurrency.

However, ethereum still has a long way to go before that happens, but the possibility certainly exists. At the time of writing, its market capitalization was 47 percent lower than bitcoin’s, at $487 billion.