Bitcoin and other cryptocurrencies are renowned for their around-the-clock trading access, but this constant availability may have played a role in a significant sell-off during recent global market turmoil. Following a record-breaking $5 trillion loss in the S&P 500 over just two days, Bitcoin managed to stay above the $82,000 support level, but by Sunday, it had dropped below $75,000.
Unlike traditional stocks, Bitcoin remains tradable during weekends, which can create unique challenges. According to Lucas Outumuro, head of research at crypto intelligence platform IntoTheBlock, this situation can lead to accelerated corrections during periods of panic, as Bitcoin is often the only large asset available for trading when most markets are closed.
“There’s very little people can sell on a Sunday because most markets are closed. That also enables the correlation because people are panicking and Bitcoin is the largest asset they can sell over the weekend.” - Lucas Outumuro
Despite its volatility, Bitcoin can also benefit from calmer weekend trading conditions, allowing for potential price rallies. The digital asset initially appeared to decouple from traditional financial assets after a $3.5 trillion drop in the stock market, spurred by concerns over the Trump administration's reciprocal tariffs.
However, the panic from traditional markets soon spilled into cryptocurrencies, causing Bitcoin to drop significantly. Adam Back, CEO of Blockstream, highlighted that many Bitcoin investors are overleveraged, which adds further risks to the market. He noted that most Bitcoin enthusiasts are fully invested, creating a precarious trading environment.
“The problem with the Bitcoin market is most of the people who are into Bitcoin are all in. So they've got no money. And worse, some of them are leveraged or overleveraged and it trades 24/7.” - Adam Back
With low trading volumes on weekends, the risk of rapid flash crashes increases, making the market even more volatile. Despite these challenges, Back remains optimistic, believing that Bitcoin will eventually rival gold as a hedge against rising monetary inflation.
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