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Crypto news: BTC sinks to $37,000 as short-term holders drive volatility

By Daniela Ešnerová

06:59, 22 February 2022

Coin with BTC logo with markets in red background
Most volatility has been driven by short-term holders, who now own the majority of BTC supply, Glassnode notes – Photo: Shutterstock

Bitcoin (BTC) was trading at $37,000 in European morning trade as cryptocurrency and traditional markets fell in response to intensified tensions in Ukraine after Russian President Vladimir Putin ordered tanks into Ukraine territory on Monday evening.

As BTC – sometimes touted as “safe haven” asset – was not immune to the jittery effects of geopolitical tensions on equities, most of its volatility is driven by short-term holders, according to on-chain analytics firm Glassnode.

Short-term traders are defined as those who hold the coin below 155 days and are statistically most likely to be panic-spending during any period of volatility, according to Glassnode analyst Checkmate. According to Glassnode counts, 54.5% of BTC supply is held by short-term of holders, and BTC4.7m ($177.2bn, €156bn, £130.58bn) is held at an unrealised loss.

“It’s a little bit bearish out there – when it comes to on-chain activity, the markets are little bit uncertain, not really sure how to deal with the current situation. We’re seeing that equilibrium of coins flowing in and out of exchanges, and short-term holders seem to be the most fearful cohort,” Checkmate said.

“With a total of BTC4.7m currently underwater, and 54.5% of it held by short-term holders who are statistically more likely to spend it, the bulls certainly have their work cut out for them,” he wrote.

 

According to the Crypto Greed and Fear Index – a sentiment indicator that takes into account volatility, market momentum/volume shows, social media sentiment, dominance and trends in the cryptocurrency market – indicators pointed to ‘extreme fear’ in the market. 

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Quote of the day: ‘I was wrong – we need crypto’

Danish programmer, Ruby on Rails creator and former bitcoin sceptic David Heinemer Hansson has had a change of heart on “crypto’s fundamental necessity in Western democracies” in response to the current crackdown on protests in Canada. 

BTC/USD

64,735.25 Price
-0.280% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.12 Price
-2.060% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BCH/USD

377.05 Price
-2.900% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

ETH/USD

3,426.09 Price
-0.750% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

Responding to the ongoing dispute with truckers leading protests at the US–UK border and in the Canadian capital, Ottawa, Prime Minister Gary Trudeau recently invoked the Emergencies Act for the first time since 1988.

To curb protest supporters’ donations for the truck drivers, the Canadian government broadened the country’s anti-money-laundering and counter-terrorism funding rules to include crowdfunding platforms and payment service providers that cover transactions including digital assets such as crypto.

This followed the protest suporters’ first pouring their donations through crowdfunding platforms such as the likes of GoFundMe and then by bitcoin. 

Responding to these changes, Heinemer Hansson said in his blog, “To say I've been sceptical about bitcoin and the rest of the crypto universe would be an understatement of epic proportions.” 

“I still can’t believe that this is the protest that would prove every bitcoin crank a prophet. And for me to have to slice a piece of humble pie, and admit that I was wrong on crypto’s fundamental necessity in Western democracies.”

Top cryptocurrency coins by market capitalisation

As of 10:00 GMT:

Winners and losers

  • Among the biggest losers in the recent sell-off were the sandox (SAND), having lost 8.64% over the past 24 hours and 28.33% during the past week, and fantom (FTM), which is down by13.80% day-on-day and 24.13% week-on-week.
  • There are no winners among major virtual tokens today.

Markets in this article

BNB/USD
Binance Coin / USD
579.18 USD
-2.8 -0.490%
BNB/USD
Binance Coin / USD
579.18 USD
-2.8 -0.490%
BTC/USD
Bitcoin / USD
64735.25 USD
-180.35 -0.280%
ETH/USD
Ethereum / USD
3426.09 USD
-25.96 -0.750%

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