The cryptocurrency market continues to be in the ”grip” of liquidations, with bitcoin seeing its price record new significant losses that have led to a decline of more than 20% from last week’s highs – with fresh pressure from the Japanese court’s decision to compensate investors of the Mt Gox exchange that collapsed in 2014.
Notably, the largest-cap cryptocurrency is currently trading at $56,746 with losses of 5.08%, while at the day’s low it had retreated to $55,666, and is heading for its worst week in the last six months.
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The flagship of digital currencies (Bitcoin) price has fallen by 20% from the record set last week at $68,990, now moving to its lowest level since mid-October.
In this climate and due to the huge size that the cryptocurrency market has acquired, with a large audience of small investors consisting of millions of people around the world who have invested their savings, as well as the entry of institutional portfolios and some companies that have placed part of their reserves in currencies of dubious value, there are concerns that the crypto market poses a systemic risk in the case that market makes a deep correction.
Indicative of the volatility of cryptocurrencies, is that at a weekly level bitcoin is sinking by 14%, while for the whole year its price has soared by 90%.
And as is customary, pressures on BTC are also transmitted in other digital currencies, with Ethereum currently losing 2.5% to $4,138, while on a week-on-week level its losses stand at 14%.
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At the same time, Cardano is currently at $1.81. with -2.3%, Solana is down 4% and is moving to $202.48, as Uniswap is trading at $20.78. with losses of 4.2%.
Tokyo Court Awards Damages To Investors of Mt Gox
As mentioned above, the negative sentiment today in the crypto market is largely fuelled by the court’s decision in Tokyo, awarding damages amounting to 9 billion. dollars for investors of Mt Gox, a cryptocurrency exchange that went bankrupt in 2014 after losing tens of billions of dollars in bitcoin.
Also, both bitcoin and ethereum appear to be affected by the cautious sentiment that has prevailed more generally in asset markets worldwide in recent days, under concerns about the economic recovery, central bank interest rates, and inflation.
Bitcoin’s Long Term Outlook Remains Bullish
OANDA analyst Edward Moyes points out to Reuters that “bitcoin’s long-term outlook remains bullish.”
However, according to him, “the waters will remain murky in the coming months as institutional investors wait to see if the Fed will be forced to raise its interest rates earlier than expected, triggering a broader sell-off on all high-risk assets, including bitcoin.”
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