Bitcoin prices fell around 3% on Sunday morning, after a weekend of frantic trading that saw the cryptocurrency drop more than 17% in just 24 hours.
According to Coin Metrics, the cryptocurrency traded at $48,012 on Wall Street at 10:50 a.m. Sunday.
The cryptocurrency traded marginally higher at $49,000 earlier in the day, as it tries to reclaim the $50,000 market after falling to a low of $43,000 on Saturday.
Bitcoin’s dramatic drop coincides with the broader market’s risk-off mood on Friday. Fears about what the omicron Covid variant means for the ongoing economic recovery led to all three main averages finishing Friday’s trading in the red and posting losses for the week.
The yield on the 10-year U.S. Treasury fell as investors avoided equities in favor of safer sections of the market.
On Friday, the Nasdaq Composite underperformed the Dow and S&P 500, with technology firms taking the brunt of the losses. This selling spilled over into cryptocurrencies, with no apparent rationale for the significant drops across the board.
“It appears like someone was ‘forced’ to sell yesterday due to a margin call,” said Matt Maley, equity strategist at Miller Tabak. “Because the Bitcoin market is much more “thin” on weekends, the decrease was likely accelerated. The customer returned once the dust had passed, and everything was back to normal.”
Nonetheless, the selling in the last 48 hours has added to bitcoin’s recent losses. After falling to a seven-week low of around $54,000 on Nov. 26, the cryptocurrency officially entered the bear market territory.
Maley went on to say that the level at which bitcoin steadied on Sunday — around $50,000 — is noteworthy because it’s below the trend line from the July lows.
“Whether it regains that level or not next week (once regular trading activity resumes) should be important to Bitcoin,” he said.
Bitcoin has dropped about 30% from its all-time high of $69,000, which it reached in early November.
“Bitcoin is currently in a ‘no man’s land,’ which does not appear to be changing anytime soon,” said Ed Moya, senior market analyst at Oanda. “The long-term bullish argument remains intact,” he noted, “but prices appear to be consolidating between $52,000 and $60,000.”