Bitcoin, ether extend declines as leverage unwind accelerates
Crypto markets continue to decline amid falling prices of bitcoin, ether, and other major cryptocurrencies. According to CoinDesk, the pressure on the markets has increased due to the forced liquidation of positions of traders using leverage. This has led to a sell-off and further drop in the value of digital coins.
Bitcoin momentarily dipped below the $22,000 mark, while ether fell to around $1,500. In addition, a decline was also observed in the precious metals market, indicating a broad coverage of sell-offs in financial markets.
It is worth noting that the process of deleveraging in the cryptocurrency markets is a fairly common phenomenon. Major players often use borrowed funds to increase their positions, but in the event of a sharp drop in prices, they face the need to forcibly close part of their transactions. This, in turn, exacerbates the overall market dynamics and leads to increased volatility.
Given the ongoing uncertainty in financial markets, driven by geopolitical tensions, high inflation, and expectations of further monetary policy tightening, it can be assumed that cryptocurrency assets, including bitcoin and ether, will continue to come under pressure in the near term.