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Cryptocurrencies drop sharply in overnight sell-off

By Jonna Lorenz
Cryptocurrencies drop sharply in overnight sell-off
Cryptocurrencies fell sharply overnight before rebounding Saturday. File Photo by Maxim Shipenkov/EPA-EFE

Dec. 4 (UPI) -- Bitcoin fell sharply Saturday, losing about 20% in 24 hours before beginning to bounce back.

The cryptocurrency fell from about $57,000 Friday morning to a low of about $43,000 around midnight before climbing to $48,300 at about 11:30 a.m. EST Saturday.

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Global stock markets have been volatile since the Omicron COVID-19 variant emerged, and cryptocurrencies have felt the disruptions. Bitcoin reached an all-time high of about $69,000 in early November.

Ether, the second-largest cryptocurrency, also fell to as low as $3,500 Saturday from a previous closing price of $4,211.54 before rebounding to about $4,000 at midday Saturday.

Solana, Dogecoin and Shiba Inu coin also lost more than a fifth of their value, The Wall Street Journal reported.

While no clear reason for the drop was reported, experts said disquiet over the COVID-19 pandemic and the Federal Reserve's response to inflation may be factors.

Leveraged trading of cryptocurrency derivatives may have played a role, the WSJ reported, citing Noell Acheson, head of market insights at Genesis Global Trading, who pointed to the possibility a large sell order triggered liquidations.

"The evidence points to this being yet another derivative-induced selling event," J.C. Parets, chief market strategist for All Star Charts technical research said, according to CNBC.

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