Cryptocurrencies recover the losses of “Red Friday”
Cryptocurrencies recover the losses of “Red Friday”
Crypto

Cryptocurrencies recover the losses of “Red Friday”

By Marco Cavicchioli - 29 Nov 2021

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Last Friday was dubbed “Red Friday” for markets, including cryptocurrency markets. 

Black Friday for crypto markets

The problems started as soon as the Asian markets opened, with the Tokyo stock exchange opening -1.2%, followed by Shanghai (-0.5%) and Hong Kong (-1.8%). 

European exchanges also opened with heavy losses, with Frankfurt down as much as 4% at the opening. 

US exchanges, which were only open for half a day due to the Thanksgiving weekend, recorded similar losses, with the S&P500 closing at -2.3%, more or less the same as the Nasdaq. 

In other words, all the indices seemed to be in the red, even if it was not a real collapse. 

Cryptocurrencies "red friday"
On Friday stock markets and crypto were in red

The reasons for Red Friday

The day on the financial markets was dubbed “Red Friday”, and not Black Friday as has happened on other occasions in the past due to the fact that Friday 26 November 2021 was indeed Black Friday for the consumer markets

The term “Black Friday” in the consumer markets means a day of discounts, whereas it is misleading to speak of discounts in the financial markets. 

For all intents and purposes, this was a strong retracement due to two factors. 

The first factor was undoubtedly related to the news of a new mutated variant of the Sars-Cov-2 virus that is likely to be resistant to current vaccines. Many investors have feared that the new variant, which for now is mainly widespread in South Africa, could spread to the rest of the world and bring back the need for new lockdowns. 

But since there has not been a crash like the one in March 2020, the markets seem to be cautious about assuming any major problems caused by the new variant in the world economy. 

The second factor is the huge rise in stock market indices in recent months, with many of them hitting all-time highs a week ago. 

To be fair, many analysts were expecting an unloading after such a run that actually started in April last year, although many believe it may only be a temporary retracement. 

Red Friday in the crypto markets

As usual, the crypto markets reacted with greater violence, greater volatility, and therefore greater losses. However, Red Friday on the crypto markets was not a day of record losses, but in some ways proportionally similar to those on the traditional financial markets. 

Actually, there has already been a rebound, with the price of Bitcoin falling on Friday from $57,500 to around $53,500, but then rising above $57,000 yesterday. 

The Red Friday effect on the crypto markets seems to have subsided for now, with the current situation not dissimilar to the one before Friday’s drop. Traditional funded markets, for their part, have recovered only slightly. 

The interesting thing is that both the reasons that triggered the Red Friday now seem to have exhausted their impact on prices, so from today, everything could theoretically return to normal. 

 

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".

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