After hitting $ 61,742 on Saturday, Bitcoin fell 9.2%.
Bitcoin fell on Monday as traders relaxed on the boosted bets that had propelled the digital token to a new high over the weekend.
The largest cryptocurrency fell 9.2% before trading at $ 56,131 at 1:04 p.m. New York, after hitting $ 61,742 on Saturday. Bitcoin hit its latest all-time high thanks to optimism that some of the pandemic relief payments in the United States will eventually drive out the massive digital token rally.
“The stimulus news was highlighted by everyone in the Bitcoin world over the weekend,” said Jeff Dorman, chief investment officer of Arca, an investment management firm specializing in digital assets. , during a telephone interview. “Then we came in last night, the futures were stable, the 10 years were stable, and all of a sudden it started to relax because there wasn’t as much of a bullish connotation as some of Bitcoin traders thought so. “
Dorman also pointed out how leverage in crypto markets can put pressure to sell amid larger declines.
“There is just an insane amount of leverage in the system at all times,” he says. “During any period of exuberance, you see investors borrowing to get up, and over the weekend we’ve seen all of the risk metrics that we’re seeing start to get really frothy. Usually, when this starts to happen, it’s only a matter of time before any hiccups start to liquidate those leveraged positions. “
The heated debate about the possibility of more boosted earnings and the very possibility of determining a long-term value for Bitcoin continues at a steady pace. The token has climbed more than 1000% over the past year, pushed higher by signs of increased interest from institutions and businesses alongside usual speculative demand.
Crypto has experienced “a good flow as traders need to execute US stimulus checks,” wrote Chris Weston, head of research at Pepperstone Group Ltd., adding that Bitcoin needs to stay above the previous high by a bit more $ 58,000 to build confidence. in a “new bull leg”.
Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte, and Matt Maley of Miller Tabak + Co both see the potential for further gains based on some recent chart patterns. Bitcoin could rally $ 75,000 “very quickly,” Maley said. Bloomberg Intelligence strategist Mike McGlone said $ 100,000 could be the next threshold.
The fortunes of a range of companies are increasingly tied to cryptocurrency, from listed Bitcoin miners and brokers to companies that have invested in the token.
For example, the correlation coefficient between Bitcoin and an equally weighted basket of five stocks that have announced digital currency investments – Tesla Inc., MicroStrategy Inc., Square Inc., Meitu Inc. and Aker ASA – has reached a average of 0.72 this year compared to 0.26 in 2020.
Crypto watchers are trying to gauge the outlook. Greg Waisman, co-founder of the global payments network Mercuryo, said in comments sent via email on Sunday that there was recent “whale activity,” where coins from 2013 were being moved for the first time. . Such events, he said, usually lead to sales.