Bitcoin is down by about $ 7000 ... The reasons behind this decline?
The leading cryptocurrency, Bitcoin, lost about $ 7,000 after it reachd an all-time high of $ 61,683.
At the time of writing this article, Bitcoin is trading at 54,352.01 with a daily trading volume of $ 74 billion according to Coingecko.
Bitcoin has dropped 9% in the last 24 hours.
The current market value of Bitcoin is $ 1.0005 trillion.
The reasons behind this decline?
Nikolaos Banegertzoglu, who is one of the most famous analysts at JP Morgan, points out that the Bitcoin decline is due to the exhaustion of bitcoin-buying speculators, as the leading retail investors in the field of cryptocurrencies retreated and stagnated, amid a clear decline as well. In the institutional inflows so far.
According to data released by JP Morgan, retail investors bought around 187,000 Bitcoins this quarter of the New Year 2021, compared to 172,684 by institutional investors when using data from the Square platform and PayPal.
The announcement of the US stimulus plan indirectly contributed to the rise of Bitcoin to new highs, but the short-term price action is now revealing its extreme decline.
Mr. Stephen Innes, chief global market strategist at Axi, told his opinion of the reasons that led to the massive sell-off and the decline of Bitcoin, and stated:
- There were strong attempts around the Doge digital currency to raise it higher, but the coin did not respond to the tweets of celebrities, but rather retreated, revealing negative momentum in the crypto space.
- This failure to maintain winnings is worth noting, as increased mobility can be a game-changer
- But selling may refer to either:
- A) Expectations to purchase risky assets with check cash money may be overstated or
- B) A large portion of the money will be used to pay off tax liabilities or
- C) Newly printed cash will find its way into the real economy now that restaurants, Vegas and beaches reopen.
- For many retail cryptocurrency traders, Bitcoin has been the outlet for moving and investing money.
Ed Moya, Senior Market Analyst at Oanda Corp, told Bloomberg:
Bitcoin has maintained an impressive bullish trend.Retailers have also been revitalized with the latest buzz in the NFT market, all with stimulus checks arriving at their bank accounts.
It is important to note that the world's leading cryptocurrency has gained about 990% last year, so it seems that profit-taking at this stage is a normal scenario considering that some investors, whether individuals or institutions, withdraw some of their gains.