Experts: Institutions Took Crypto Profits As Macro Picture Is Uncertain

Cryptocurrency traders over the weekend were shook by a market wide correction, which the crypto experts believe was caused by institutional selling.

Bitcoin fell below $43,000 overnight on Saturday, from highs near $57,000 during Friday’s session. While the price of bitcoin has since recovered some of the losses and is currently trading above $49,000, according to trading executives it was large institutional selling that triggered a broader market shift.

According to an expert one institution sold more than $500 million in bitcoin on Friday morning, which triggered “aggressive liquidations” in the crypto derivatives market, the person added.

The market saw more than $1.3 billion in long positions liquidated in the move from $51,000 to $42,000. Total open interest in the derivates market also fell from $21.6 billion to $16.7 billion in less than an hour.

While large scale liquidations are nothing new to the crypto market, over the last year or so, certain market drawdowns have been boosted by over-levered traders on offshore venues being liquidated.

Aya Kantorovich, an executive at crypto firm FalconX, said:

“Everyone has had a good year, and with this player coming from traditional finance, they have their eye on the macro environment which currently looks shaky.”

Crypto and equities traders have been fed headlines related to the emerging variant of COVID-19 known as omicron and indications from the U.S. Federal Reserve that faster tapering might be on the horizon.

However, according to Kantorovich, there are still buyers at play. She explained: