Bitcoin
Other cryptocurrencies fell on Friday, in what appeared to be a short-term correction after the digital asset's torrid rally. Even if traders remain bullish on the outlook for cryptocurrencies in the coming months, prices could fall further.
Bitcoin price has fallen 6% in the past 24 hours, falling below $68,000. The largest cryptocurrency last traded below $65,700, dropping more than 9% from its daily high to low. This appears to be a short-term correction from record levels. Bitcoin hit $74,000 earlier this week after topping a November 2021 high of about $69,000 the previous week amid a bull market that saw the digital asset's market cap rise to $2.6 trillion. The highest value was recorded nearby.
“Bitcoin looks very bullish, even if the correction is significantly delayed in the coming days,” said Rachel Lin, CEO of trading platform SynFutures. “Bitcoin is clearly in price discovery mode and could see a strong uptrend in the coming weeks and months.”
In fact, Bitcoin is still up about two-thirds this year and continues to be supported by several catalysts.
That includes joy in the stock market and a broader improvement in risk sentiment.
S&P500
and
Nasdaq
It remains near record levels, reinvigorating cryptocurrencies that have long been shown to be correlated with stocks. Traders are also bullish on Bitcoin's so-called halving, with the token's planned monetary policy tightening expected to limit supply next month, potentially pushing prices higher when demand is high. be.
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But the biggest boost for Bitcoin came from the Spot Bitcoin Exchange Traded Fund (ETF), which was approved by the Securities and Exchange Commission in January and ushered in a new wave of investor interest in the cryptocurrency. It is something. With billions of dollars flowing into these funds and holding not only the derivatives that track its price, but also Bitcoin itself, its record popularity has had a big impact on the token's price.
Marcus Levin, co-founder of blockchain network , it's serious.'' “Of course, we could see a significant decline…but we expect this trend to continue for some time.”
Nevertheless, the digital asset fell sharply on Friday, and prices could fall further depending on how much bubbles have built up in cryptocurrencies amid the bull market of recent weeks. The vast majority of traders use borrowed money to pile up bullish leveraged bets on Bitcoin futures, but this dynamic means that if the market moves against the positions held by most traders, Prices become vulnerable to volatile fluctuations.
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“A new historic high will trigger a sell-off,” said Alex Kupczykevich, an analyst at broker FxPro. “The question arises as to whether the majority would prefer to wait for a deeper adjustment.”
“In a correction scenario, the $65,000 to $65,500 and $60,000 to $60,500 areas are of particular interest because these areas include round levels that are important for retail.” [investors],” he added.
Beyond Bitcoin
ether
The second-largest cryptocurrency by market capitalization fell 5% to below $3,700. Smaller tokens and altcoins are even weaker.
cardano
8% collapsed;
polygon
Plunging 8%. Meme coins fall;
dogecoin
and
Shiba Inu
each drop out by 11%.
Email Jack Denton at jack.denton@barrons.com.
