Cryptocurrencies were down on Monday morning after bitcoin’s price took a battering over the weekend.
Bitcoin (BTC-USD) was down almost 3% at the time of writing, trading at $48,143 (£36,304). That’s almost 30% down from its all-time high of $69,000, which it hit last month. Over the weekend it had fallen to about $42,000.
The crypto was trading near two-month lows as a level near $42,000 was last seen in the first few sessions of October of 2021.
Ethereum (ETH-USD) the world’s second largest crypto by market cap, was down almost 5%, trading at $4,015.
Solana (SOL1-USD), seen by many as a competitor to ethereum, was down almost 9% at the time of writing, trading at $182.
This has “reignited the jitters around cryptocurrencies as investors reacted negatively following the lacklustre Wall Street closing with Nasdaq falling nearly 2%,” Kalkine Group CEO Kunal Sawhney told Yahoo Finance UK.
“The market-wide resurgence of COVID cases in many European nations, alongside the rapid emergence of the Omicron variant in the UK, US and certain Asia-Pacific regions have storm-tossed all conventional assets including equities, oil, currencies and fixed-income securities,” said Sawhney.
He said that with this renewed uncertainty in markets, investors are shifting their focus towards safe-haven assets and “a contagion effect has been seen in the crypto-ecosystem”.
Sawhney believes any potential disruption in cross-border trade, travel, operations of businesses and other sectors contributing towards national economic output can severely impact all assets, “with cryptocurrencies set to absorb maximum heat”.
Meanwhile Naeem Aslam, chief market analyst at Ava Trade, said the “weekend’s sell off was nothing short of a horror movie” and crypto traders are still nervous about the massive plunge in bitcoin’s price.
The most important price level for the bitcoin price is $50K – when the price violated this support, the price action was a “bloodbath”, he said.
But he believes the price is more stable now and for those who “understand the potential of bitcoin”, the plunge provided a great opportunity.
“In fact, for them, it was Christmas coming early. Now, in terms of the BTC price, we are focused on two important price levels.
“First is the support of $40K, and traders are hoping that the price will stay above this price. As for the resistance, we need to see the price breaking above the 50K price mark and stay above this.”
“So far, it is pretty clear that the recent sell off brought a lot of newer buyers into the market. Once the dust settles, we are likely to see more funds reporting their new positions in bitcoin.”
However, DeVere’s group CEO Nigel Green is still bullish on solana, claiming it will outperform both bitcoin and ether “because of its masterful technology and its cost-effectiveness”.
“Solana is a blockchain platform that has superior high transaction speeds, processing over 2,500 transactions per second — main rival ether’s is 15 — and at a lower cost and without compromising decentralisation,” he said.
“This revolutionary tech will ultimately change the way almost all business and financial services are delivered in the future. As such, a growing number of decentralised finance (DeFi) applications are moving to solana.”