The price of bitcoin and other leading cryptocurrencies fell significantly during morning trading in Asia. Investor sentiment is being pressured by uncertainty following the high-profile resignation of Nvidia co-founder Jensen Huang, as well as expectations of another interest rate hike by the US Federal Reserve (Fed).
Market dynamics and large-scale liquidations
Over the past 24 hours, the value of the first cryptocurrency has fallen by 7% — to the $68,408 mark (as of 07:10 Kyiv time on Friday). This is the lowest level since August 20, The Block reports.
According to CoinGlass, the total volume of liquidations on the crypto market over the past 24 hours reached $1.47 billion, affecting the positions of 175,299 traders (of which $1.31 billion were long positions). Moreover, in just the last four hours, positions worth $798 million were liquidated, including $718.5 million in longs.
Head of markets at Laevitas, Rick Maeda, explained that the sharp downward move was caused by a cascade liquidation of leverage after the breach of key support levels:
"BTC has already lost the $72,000 level during the American session, and just now it broke through $70,000 late in the morning in Asia; long positions clustered below this level were quickly knocked out of the market — over $600 million in four hours and over $1.3 billion in the past 24 hours."
Scandal at Nvidia and macroeconomic pressure
Analysts identify two main reasons for the current turbulence in the market.
On Thursday morning, Jensen Huang resigned from the position of CEO of Nvidia after the company launched an investigation into his ties to an alleged Chinese spy. According to media reports, this concerns Huang's extramarital affairs with one of Nvidia's top managers who reported directly to him, as well as with another company employee. This provoked investors' retreat from risky assets.
BTSE Chief Operating Officer Jeff Mei noted that bitcoin is under pressure from forecasts of a December Fed rate hike to combat inflation. According to him, traders fear a hike of as much as 50 basis points at once instead of the expected 25 — such a scenario would open room for a further decline in cryptocurrencies.
At the same time, ViaBTC chief analyst Jeff Ko believes that in the long term, sustained inflation may, on the contrary, strengthen bitcoin's appeal as a hedge asset. Going forward, markets will closely monitor the personal consumption expenditures (PCE) index at the end of November, the Fed meeting on December 9, as well as the geopolitical situation — in particular, a potential de-escalation around Iran, which could quickly reduce inflationary pressure.