Bitcoin pullback gathers pace with a 14% slump

Bitcoin Trade

Red everywhere! Bitcoin witnessed its largest daily drop in a month after flying past the $50,000 mark, as investors have started to get a little nervous about the lofty valuation of the original cryptocurrency.

That, and some leveraged players took their profits along the way.

To be fair, there has been no shortage of voices suggesting that the digital currency seems overvalued, prime among them of Elon Musk. And though Bitcoin remains up about 75% for the year, this current withdrawal is sharp from the record high it hit on Sunday.

And it happened despite broad dollar weakness.

In the word of James Quinn, managing director at digital asset platform Q9 Capital in Hong Kong:

“The market’s rallied almost unimpeded since the beginning of the month and to some degree since the beginning of the year. Seeing some selling at all is perfectly healthy and normal.”

That said, some $1.5 billion in liquidation of leveraged positions on crypto exchange Binance is an indication that some investors might be selling. Big money managers that have begun to take the asset class seriously with their large purchases that drive the confidence among small speculators.

It is these investors that are worried that the price of Bitcoin may have gotten too high, too fast.

The fact that the market is so lacking in fundamentals, it is the big figures that are proving to be the support and resistance points at various levels during this dizzying rally.

As thing stand, Bitcoin hit the lows of $46,568 before starting its eventual climb.


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