According to Bloomberg, Bitcoin, the original digital asset, has plunged to its lowest level in a week. This drop, which saw Bitcoin fall as much as 7.5% to $65,214, was triggered by a resurgence of risk aversion in global financial markets, leading to the liquidation of bullish bets on the cryptocurrency. This is the lowest price Bitcoin has seen since April 5.
Smaller tokens such as Solana and Dogecoin experienced even steeper declines, dropping around 12% and 13% respectively. The global financial world was thrown into turmoil on Friday due to a sudden increase in geopolitical risks. This resulted in a slide in stocks and a rush towards safer market corners such as bonds and the dollar. Concurrently, oil prices rallied.
Traders who were hoping to profit from the recent rally saw about $417 million in long liquidation of derivatives positions in the past hour, as per data from Coinglass. The liquidation in the past four and 12 hours were $663.9 million and $751 million in long positions, respectively. Total liquidations amounted to $847.6 million.
This sudden downturn followed a period of rising Bitcoin prices, partly driven by Bitcoin halving. This code update has been viewed as a positive market catalyst as it reduces the supply of the digital asset. Despite the recent drop, Bitcoin is still up around 60% this year.