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Bitcoin plunges below $50,000 during weekend sell-off

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Yahoo Finance Live hosts Brian Sozzi and Brian Cheung look at market futures and bitcoin's plunge below $50,000 this past weekend.

Video Transcript

BRIAN SOZZI: Brian Cheung, who also joins me right now. Brian, let me get over to you because it is interesting to see this rally alongside what we saw in crypto prices over the weekend. And at one point, Brian, crypto, the benchmark crypto, Bitcoin, was down 20%.

BRIAN CHEUNG: Yeah, certainly a nasty move over the weekend. Now, some people were arguing it could have been because of light volume. Obviously, weekend trading a bit of a different dynamic than your normal weekday trading. But that was the big story over the weekend, Bitcoin falling to below $50,000, well below $50,000 is a huge drop when you consider that.

Bitcoin levels were at about $57,000 per coin as of Friday. So, obviously, a very steep drop. You can see that pretty nasty kind of precipitous fall over the course of Saturday's trading hasn't recovered since that point in time. And, really, interesting dynamics at play here when you consider that you have nobody really with one clear explanation for why this has happened. It's kind of always the case, that you can't pin any sort of movement in Bitcoin to one singular news item.

But when you see a drop of that substantial amount, you do kind of wonder what's happening here. And I kind of hearken back to a conversation, I believe, it was Kinjal Shah over at Blockchain Capital who I spoke to a few weeks ago. And she had pointed out at the time that this chapter of crypto really hasn't seen a bear market in the macroeconomic picture when you consider this kind of current theme of web three, Metaverse, NFTs, what have you.

They haven't seen a 2007 to 2009 bear market that has lasted over a more prolonged period of time. That's not to say that a recession is coming, but you take a look at bond markets right now, narrowing of spread between certain edges of the curve, that might be one explanation for why the bond market is flashing yellow on risk assets.

So, again, there could be some argument as to whether or not the Fed has put a put in the market that would not create any sort of bear market volatility in the future, but you do wonder if maybe that whole macro theme is really weighing on Bitcoin as well, Brian.

BRIAN SOZZI: Yeah, Brian, I mean, suddenly now you're looking at the Federal Reserve potentially leading to this crypto pullback here. But let's keep in mind too, we have that crypto panel, a bunch of really heavy hitters are going to testify in front of the House this week on crypto prices. And I wrote about this a little bit in the morning brief newsletter this morning, be careful what you wish for. So many crypto folks have come on our program telling us we want regulation, bring it on, we're all for it. Well, I encourage them now to repeat those words in front of the likes of Maxine Waters. Good luck with that one.

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