Bitcoin drops after first US omicron case

The discovery of the Omicron variant of the coronavirus has resulted in a shakedown in global financial markets and the cryptocurrency markets were no exception. With investors rushing towards safe-haven assets and abandoning riskier ones, it wasn’t a surprise that prices of Bitcoin and other digital currencies had come down. They had bounced back 2 days after the sell-off, but there seems to be upheaval once more. The crypto market began the month of September with a mixed performance because the traders are still unsure and appear to be in the wait-and-see mode. Now, as per the latest cryptocurrency news on Wednesday, Bitcoin saw its price drop briefly below the $57,000 mark in the US trading hours.

This was after announcement that the first case of the Omicron variant had been confirmed in the country. The case had been identified in California and this prompted the price of the world’s leading cryptocurrency to fall once more. At the time of writing, the value of Bitcoin was just a bit above the $57,000 mark, which still remains down for the day. Due to this drop, the earlier gains that the pioneer cryptocurrency had made were wiped out, when it had gone beyond the $59,000 mark after being at a low of around $55,920 just a day earlier.

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There was also a decline in stocks, as the S&P 500 reported a drop of 0.49% on Wednesday. However, despite the fall in the crypto market, analysts are positive about the potential long-term impacts of the Omicron variant on the market in general. The new variant had undoubtedly given rise to concerns about the falling prices of cryptocurrencies, but analysts pointed out the crypto space had undergone substantial growth throughout the pandemic, much more than any other market. Ether had also declined on Wednesday from a high of $4,782.40 to about $4,575, which brought its four-day winning streak to an end.

Ether had proven to be a good investment asset in November, as it posted a strong monthly return, surpassing Bitcoin as well as other macro assets, including gold, the S&P 500 and bonds. Nonetheless, the price momentum of Bitcoin is definitely improving and this could limit a further decline between the $53,000 and $55,000 support range. In the past week, the cryptocurrency has remained flat for the most part and appears to be trading in a tight range. The daily chart shows that the relative strength index (RSI) is rising from last week’s oversold levels, which typically happens before an increase in price.

Considering the 100-day moving average that’s upward sloping, it is obvious that support remains intact. In other news, cryptocurrency executives will be questioned in the Congress. A US congressional committee has called on executives from eight major crypto companies to testify on December 8th. These will include executives from crypto exchanges and other companies that are operating in the space. Those who have been called include Brian Brooks from Bitfury, Jeremy Allaire from Circle and Alesia Haas from Coinbase.

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This would be the first time that representatives of the controversial crypto sector will be questioned in this manner. US politicians have recently called for greater scrutiny of the cryptocurrency market. Cryptocurrencies have been described as a ‘scam’ by Donald Trump whereas tough regulation of the sector has been demanded by Elizabeth Warren from the left of the Democratic Party. Bitfury’s Brooks had previously worked under the Trump administration as a top regulator and had also played a role in making policies pertaining to cryptocurrencies.

While these digital currencies can be used for making payments, it is important to note that cryptocurrencies cannot be classified as currencies in the traditional sense. They act more like securities or vehicles and have become quite notorious for their volatility. Countries all over the globe are taking different approaches for dealing with them. For instance, China has imposed a complete ban on digital currencies, while El Salvador has adopted Bitcoin as legal tender.