Bitcoin continued its decline on Tuesday, plummeting by over $10,000 at one stage from its record high reached last week.
According to Coin Metrics, the leading cryptocurrency has dropped 3% to $65,209.00. It had previously dipped to $62,320.30, following a recent peak of $73,679. Bartosz Lipiński, CEO of Cube.Exchange, suggests that as ETFs acquire bitcoins, diminishing liquidity could lead to more frequent price fluctuations.
This trend might erode confidence in bitcoin’s pricing integrity, prompting investors to explore alternative crypto assets.
The downward movement had a ripple effect on other cryptocurrencies, with Ether declining by over 4%, currently trading at $3,304.61, down from its recent peak above $4,000 last week – a decline anticipated by some analysts after the network’s Dencun upgrade. Solana’s token saw a 7% drop, while dogecoin and XRP both experienced losses of 5% and 2%, respectively.
Although crypto-related stocks managed to trim earlier losses, they continued to face downward pressure. MicroStrategy, a proxy for Bitcoin, saw a 6.5% decline, while Coinbase, a prominent crypto exchange, fell by 3%. Mining stocks, including Riot Platforms and Marathon Digital, were uniformly down, with decreases of 1% and 2%, respectively.
“While this pullback may be brief, there is a possibility that the rally could resume; however, concerns about a potential recession next year cast a shadow over the markets, potentially affecting the rally in unforeseen ways,” Lipiński commented.
Bitcoin’s vulnerability surfaced last week as traders began cashing in on profits following its staggering 70% surge since the beginning of the year, peaking last Wednesday. Data from CryptoQuant indicates a significant surge in short-term holders offloading their bitcoin holdings at a profit on March 12.
Furthermore, this profit-taking activity led to a notable increase in the liquidation of long leveraged bitcoin positions. CoinGlass reports approximately $142 million worth of long liquidations across centralized exchanges in the past 24 hours, with $122 million occurring on Monday alone. Last week witnessed approximately $372 million in long liquidations from Wednesday to Friday.
The recent successful introduction of spot bitcoin exchange-traded funds in the U.S. has significantly fueled bitcoin’s upward trajectory. This surge began even before the ETFs were officially launched, driven by anticipation of regulatory approval. Concurrently, heightened investor interest and demand for bitcoin have spurred increased leverage and amplified high-frequency volatility in the market.
Both investors and analysts are advising caution for March, foreseeing more pronounced price swings and heightened trading volumes, which could prompt pullbacks from bitcoin’s overarching uptrend.
Chart analysts generally agree that bitcoin is poised for further highs, although they also acknowledge the potential for sharp corrections during its ascent.
Read More: Bitcoin’s 7% drop results in $660M liquidated in a day
Disclaimer:
This content is AI-generated using IFTTT AI Content Creator. While we strive for accuracy, it’s a tool for rapid updates. We’re committed to filtering information, not reproducing or endorsing misinformation. – Jomotoday for more information visit privacy policy
Leave a Comment