In the past less than a week, bitcoin has dropped over 10 percent from its all time high of $73,083 it hit on March 13 at trade at $65,300 in the early hours on Sunday.
Other crypto tokens also followed the downward trend. Ether fell 6.43 percent to trade at $3,488, Binance Coin lost 8 percent of its value to trade at $564 and Solana lost 4.6 percent of its value to trade at $184, CoinDesk data reveals.
The recent fall is being attributed to profit-booking and the US inflation data release, while there are projections of losses in the next few days.
There are a few analysts who predict future losses in the coming weeks before the price of bitcoin recuperates.
Some investors are doing profit booking, which brings to question whether there will be sufficient number of buyers at this price levels or whether they would like to wait for further correction to happen, reported CoinDesk quoting Alex Kuptsikevich, a senior market analyst.
ALSO READ: Bitcoin’s bull run screeches to a halt; drops 7 per cent in a day
“Crypto is a volatile asset and past bull runs have seen 20-30% drawdowns before continuing their increase in prices. The advice for traders would be to be cautious with leverage as volatile price swings in either directions can cause liquidations. The next big trigger for BTC prices is the halving of miner rewards, scheduled for April 20, which will result in a massive supply shock,” said Parth Chaturvedi, Investments Lead, CoinSwitch Ventures.
Swissblock, a digital asset analytics firm, in a note on Wednesday said that bitcoin has risen almost double in price from $38,000 in late January without any big reason, and therefore a cooling period is imperative. “Nothing rallies in a straight line. Not even BTC,” said Swissblock analysts.
| Date | Closing price ($) |
| March 11 | 72,123 |
| March 12 | 71,481 |
| March 13 | 73,083 |
| March 14 | 71,396 |
| March 15 | 69,403 |
| March 16 | 65,315 |
Highest price level
It is worth recalling that Bitcoin, the oldest cryptocurrency, had hit $73,000 on March 13 to become the eighth largest asset worldwide by market capitalisation, outpacing silver after the CPI data release.
The momentum of price jump was built after the US markets regulator Securities and Exchange Commission (Sebi’s counterpart in America) cleared spot bitcoin ETFs.
For the unversed, spot bitcoin ETF is an investment instrument which can invest directly in bitcoin instead of its derivative contracts.
This enabled investors to get direct exposure to bitcoins rather than through derivative contracts.
Meanwhile, the recent fall has not shaken the confidence of industry veterans even by a whisker. Nischal Shetty, Co-founder, President of Shardeum and Founder of WazirX, posted on X, that as bitcoin gains mass adoption, there could be a situation wherein countries would be rated by their bitcoin reserves.
“If Bitcoin achieves mass adoption, we might see a future where countries are rated by their Bitcoin reserves. Some countries recognise this possibility and are taking Bitcoin positions. Many more countries will join in eventually,” he wrote on micro-blogging platform.
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Published: 17 Mar 2024, 02:31 PM IST