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Bitcoin wipes over $60 billion from its market cap since the New Year

Bitcoin wipes over $60 billion from its market cap since the New Year

The price of Bitcoin (BTC) fell sharply late on January 5 as the flagship digital asset sank as low as $42,800 after falling from over $46,000 in less than three hours. 

Since the beginning of the year, Bitcoin’s overall market value has dropped by $62 billion, or almost 7%, from $878 billion on January 1 to $816 billion on Thursday, January 6.

BTC YTD market cap . Source: CoinMarketCap

With a 39.7% share of the global cryptocurrency market dominance, Bitcoin is now selling for $43,080, a decrease of 7.10% in the past 24 hours and 8.38% in the previous week, according to CoinMarketCap statistics.

BTC 1-day price chart. Source: CoinMarketCap

Expert opinion

Immediately upon publication of the minutes of the December meeting of the U.S. Federal Reserve (Fed), the cryptocurrency market plunged. After starting a record asset-buying program in 2020, when the coronavirus pandemic first surfaced, the government said in 2022 that it would gradually decrease its $8.3 trillion balance sheet.

Consequently, up to $110 million of BTC longs were liquidated in 15 minutes and wiping out roughly $315M of perpetual futures open interest in 30 minutes, crypto futures in total worth over $812 million were liquidated, leaving cryptocurrency trading experts divided on what’s next for the digital asset.

Lead Insights Analyst Will Clemente stated:

“Honestly surprised we didn’t see more of a flush today if this was aggressive longs built up. It could still resolve to the upside. All I know for sure is that this party is just getting started.”

Futures Open interest Leverage Ratio. Source: Glassnode

Whereas, Kaleo a renowned crypto trader, revealed:

“I’m starting to lean bearish. It just doesn’t feel right that we’ve been consolidating in this range for so long without being able to reclaim any significant levels higher.”

He added: 

“March was when I was expecting this cycle to top, and at this point it would take quite a bit to see the reversal we need to get there. Plenty of charts have already broken beneath key HTF support levels (e.g., ETH).”

ETH/U.S. Dollar chart. Source: Kaleo

The global crypto market cap

As a result of the Bitcoin price crash, in turn, it has affected the overall market, with the total market capitalization of all cryptocurrencies standing at $2.05 trillion, representing an 8.58% decrease over the previous day. 

Global crypto market cap chart. Source: CoinMarketCap

Over the past 24 hours, volume is $158.2 billion, representing an 82.61% increase from the previous day. DeFi is presently $23.72 billion, reflecting 14.99% of the total 24-hour volume in the cryptocurrency market, whereas the volume of all stable currencies is now $131.95 billion, 83.41%.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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