Anthony Scaramucci, the former White House Director of Communications, believes that Bitcoin’s bull market is still intact despite the recent price drop to $30,000. A few days ago, Bitcoin fell from over $56,000 per coin to $30,000 in some exchanges. This price action came after Tesla’s decision to stop accepting Bitcoin for their cars due to energy consumption concerns. Furthermore, China has also announced that it banned financial payment institutions from crypto businesses.
Bitcoin Bull Market Continues
According to Anthony Scaramucci, the Bitcoin bull market continues. The founder of SkyBridge Capital believes that the recent capitulation in the market was related to small players that were using “tremendous” amounts of leverage.
Over the last years, a large number of cryptocurrency companies and exchanges started offering users the possibility to invest using leverage. Perpetual contracts became very useful for those investors that wanted to get larger exposure to some digital assets without owning the underlying asset.
This has created a situation in which billions of dollars were invested in the crypto futures market with high levels of leverage. In just a few minutes the market started falling and reached levels not seen in several months. Bitcoin fell to $30,000 and bounced to $40,000 a few hours later. In this way, thousands of positions were liquidated in minutes.
About the recent price action, Scaramucci commented:
“I still think the bull market is intact for Bitcoin. Most of the smaller players are using tremendous amounts of leverage. We think over $8.6 billion of crypto accounts were flat out liquidated yesterday. Long term Bitcoin is bouncing back.”
Apparently, more than $9 billion in long positions were liquidated as the digital currency continued falling. Users’ collateral was not enough to cover this price decrease. Moreover, many investors didn’t use stop-loss orders to reduce their risk and exposure in case of a massive sell-off.
The whole cryptocurrency market has fallen in recent days. No cryptocurrency was able to avoid a 10% decrease or more in recent days. Bitcoin is now being traded close to $39,500 and it has a market valuation of $748 billion. Ethereum, which was surpassing its all-time highs almost on a daily basis, is now being traded close to $2,716 and it has a market capitalization of $321 billion.
Other digital assets have also fallen, including Binance Coin (BNB), Cardano (ADA), XRP, Dogecoin (DOGE) and Litecoin (LTC). Few virtual currencies are operating in positive territory.