Bitcoin (BTC) plunged to around $ 42,072 at noon on December 4, after several days of bearish reaction beginning on December 2.
This record indirectly brought the BTC price drop to almost 40% from an all -time high (ATH), $ 69,049 on November 10, 2021.
As usual, the depreciation of BTC also had a negative impact on several major altcoins: Ethereum (ETH), Binance Coin (BNB), Solana (SOL), Cardano (ADA), Ripple (XRP) causing the crypto market value to disappear by up to $ 300 billion.
However, Bitcoin bounced back to over $ 49,000 on Sunday before declining again and trading at $ 48,953, down more than 0.16% in the 24 hours of this article.
Some factors that investors may be aware of following this incident:
The presence of the COVID-19 ‘Omicron’ outbreak rocked the world with the first case recorded on 28 November.
Announcements from the central bank of the United States (US), the Federal Reserve (The Fed) that want to speed up tapering or bond purchases due to rising inflation and encouraging employment sector growth.
A statement from Chinese giant Evergrande indicated they may not last long due to lack of funds to meet financial allocations: "There is no guarantee the company has enough savings to survive."
Omicron’s presence carries the same impact as the BTC decline on March 12, 2020. This means the impact may not be long as the crypto market will bounce back from the intensifying panic.
But, it is also not impossible if the crypto market will deteriorate. According to the chief operating officer of the crypto hedge fund Ark36, Anto Paroian, market uncertainty will cloud investors' emotions:
"Bitcoin's main indicator, the 20-week Simple Moving Average (SMA) shows that its level has been broken. This indicates bearish in the short and medium term. But the situation for short -term leverage is very tight and it is possible that this correction will be repeated. ”
For the record, the Crypto Greed and Fear Index is currently back at ‘extreme fear’ levels, the worst record since July.
Meanwhile, this is not the first time Bitcoin has declined due to Evergrande.
The link between these two different entities is that Tether (USDT) is said to own $ 30 billion worth of commercial paper from Evergrande.
Tether has previously denied the commercial paper’s allegations but the extent to which it is true remains a question mark.
