Bitcoin It fell further on Wednesday, briefly falling below the $61,000 mark, continuing a sell-off that began last week after the cryptocurrency hit all-time highs.
Bitcoin prices rebounded to just over $62,900 as of around 03:38 a.m. ET, down about 2.5% from 24 hours ago, according to CoinDesk.
Bitcoin has performed well, rising 124% in the last year. The world’s largest cryptocurrency hit an all-time high of nearly $73,800 last week.
The cryptocurrency’s price has been supported by the launch of a spot Bitcoin exchange-traded fund in the United States in January, as well as the upcoming halving – an event written in Bitcoin’s code that effectively slows the supply of the digital currency on the market. Historically, halvings have been supportive of prices.
Since Bitcoin hit all-time highs, the value of all existing digital currencies has fallen significantly, down $210 billion as of Wednesday morning, according to Coinmarketcap.
Since Bitcoin hit its all-time high, the entire cryptocurrency market has lost approximately $400 billion in value, with other digital assets such as ether and Solana also fell sharply.
Part of the decline may be due to profit-taking following the cryptocurrency’s sharp rise.
Data from CryptoQuant shows that on March 12, the number of short-term holders selling Bitcoin for profit increased significantly.
“In previous Bitcoin bull markets, when things started to heat up, it was normal for us to see 20-30% retracements. We did have a lot of signs over the past week that things were heating up,” Vijay Ayyar, Vice President, International Markets and Crypto The growth of currency exchange CoinDCX, told CNBC.
Data from BitMEX Research shows that the Bitcoin ETF has gained some momentum, with net outflows from the fund totaling $154.4 million on Monday. This is the first time the ETF has recorded net outflows since March 1.
Grayscale Bitcoin Trust (GBTC) saw outflows of $642.5 million, while other ETFs saw modest or flat inflows, according to BitMEX Research.
GBTC has been criticized for its above-average fees. However, Grayscale CEO Michael Sonnenshein told CNBC earlier this week that the cryptocurrency fund manager expects to lower fees on its Grayscale Bitcoin Trust ETF in the coming months.
Ayyar said that if Bitcoin falls below the $60,000 threshold, the cryptocurrency may weaken further and test the $50,000 to $52,000 level, “which will be our bottom line to sustain this bull market.”
– CNBC’s Tanaya Macheel and Ryan Browne contributed to this report.
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