Last weekend, Bitcoin and Ethereum suffered significant losses as the stock market selloff spilled over into the cryptocurrency market.
As the world's top cryptocurrency, Bitcoin briefly approached $60K earlier in the week, with some predicting a $100K valuation by year-end. However, data from CoinMarketCap revealed a weekend rout across the top five cryptocurrencies:
- Bitcoin plunged over $10K within 24 hours, dipping below $50K by Saturday.
- Ethereum nosedived from $4,200 to $3,636.56 before a slight recovery.
Key Drivers of the Crash
Chris King, CEO of Eaglebrook Advisors, identified two major factors:
- Omicron variant fears
- Anticipation of Fed tapering
These issues were amplified by low weekend liquidity, which exacerbates price swings.
"Crypto falls harder during global downturns due to its volatility and risk-on nature," King told Fortune.
Why Weekends Are Volatile
- 24/7 Trading: Unlike traditional markets, crypto trades nonstop—but with fewer participants on weekends.
- Limited Liquidity: Fewer traders mean sell-offs have outsized impacts.
- Banking Constraints: U.S. traders can’t access additional funds when banks are closed.
King emphasized that such dips are normal market corrections, not long-term threats. Many investors even seized the opportunity to buy the dip.
By Monday afternoon, both Bitcoin and Ethereum rebounded ~1%, though Bitcoin remained 20% below its 7-day high ($59,113) and **30% below its 30-day peak** ($68,789).
FAQ Section
Q: Should I panic about weekend crashes?
A: No—these are typical volatility episodes. Focus on long-term trends.
Q: How does liquidity affect crypto prices?
A: Lower liquidity = sharper price movements. Weekends see thinner trading volumes.
Q: Is now a good time to invest?
👉 Explore crypto strategies for timing the market.
Key Takeaways
- Weekend crashes stem from liquidity gaps and global market spillovers.
- Dollar-cost averaging mitigates timing risks.
- Stay informed—volatility creates opportunities.
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