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Bitcoin briefly falls below $63,000 after hitting $73,000 last week
Bitcoin it extended its fall on Tuesday, shedding more than $10,000 from its all-time high last week.
According to Coin Metrics, the flagship cryptocurrency fell 4% to $64,440.14. It had previously fallen to as low as $62,320.30, after hitting a record high of $73,797.68 last week.
“As ETFs buy up the available supply of bitcoin on the open market and continue to reduce liquidity, these events may become more frequent and could cause people to lose faith in the integrity of bitcoin prices and start looking further afield” towards other crypto assets, said Bartosz Lipiński, CEO of Cube.Exchange.
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Bitcoin drops below $63,000
The move helped drag down other cryptocurrencies. Ether lost more than 4% and recently traded at $3,335.66, After surpassed $4,000 last week for the first time since December 2021 – a decline some analysts had predicted following the network’s Dencun update. The token tied to Solana fell 8% and dogecoin lost 5%.
Cryptocurrency-related stocks pared earlier losses but remained under pressure. Bitcoin Power of Attorney MicroStrategy fell 5%, while the cryptocurrency exchange Coinbase fell 4%. Mining stocks were initially down across the board, but some turned positive. The greatest, Riot control platforms AND Digital marathonlower by 3% and 0.5% respectively.
“Overall, it would be logical for this pullback to be short-lived and for the rally to resume, although the specter of a recession next year looms over the markets and could moderate the rally in ways we may not be able to predict,” Lipiński She said.
Bitcoin’s weakness began last week as traders began taking profits after it had risen about 70% since the start of the year to its peak last Wednesday. CryptoQuant data shows a massive spike in short-term holders selling their bitcoin at a profit on March 12.
Furthermore, such profit-taking has led to a spike in long liquidations of leveraged bitcoin positions. According to CoinGlass, about $145 million in long liquidations occurred on centralized exchanges in the past 24 hours and $122 million on Monday. Last week there were long settlements of about $372 million from Wednesday to Friday.
The successful introduction of spot Bitcoin exchange traded funds in the US earlier this year was a key contributor to the Bitcoin rally, which began even before the ETFs were launched in anticipation of their regulatory approval. At the same time, investor interest and increased demand for bitcoin also contributed led to an increase in financial leverage and intensified high frequency volatility.
Investors and analysts have warned that traders should pay attention in March as more volatile price action, combined with increased trading volumes, would lead to pullbacks from bitcoin’s long-term uptrend.
Chart watchers have mostly said that bitcoin is on its way to new highs, but they could also see it strong corrections along the road.