The cryptocurrency drops to $ 46,568 in its biggest daily drop in a month after breaking above $ 50,000.
Bitcoin fell below $ 50,000 as investors started to get a little nervous about the high value of the digital currency and some leveraged players took profits.
The cryptocurrency fell more than 14% on Tuesday, its biggest daily drop in a month, to $ 46,568. This extends a sharp pullback from Sunday’s all-time high to around 20%, although Bitcoin remains up around 75% for the year.
The decline came despite the broad weakness of the US dollar.
“The market has rebounded almost unimpeded since the start of the month and to some extent since the start of the year,” said James Quinn, managing director of digital asset platform Q9 Capital in Hong Kong.
“Seeing sales at all is perfectly healthy and normal,” he said, although the addition of some $ 1.5 billion in liquidation of leveraged positions on the Binance crypto exchange was significant and suggested that retail investors might sell.
The cryptocurrency market has been very hot this year as large fund managers start to take the asset class seriously and make large purchases that have boosted the confidence of small-scale speculators even further.
A $ 1.5 billion investment in cryptocurrency by electric car maker Tesla this month helped push Bitcoin above $ 50,000, but can now put price pressure on the market. company action because it has become sensitive to Bitcoin’s movements.
U.S. Treasury Secretary Janet Yellen, who stressed the need for more tightly regulated cryptocurrencies, also said on Monday that Bitcoin was extremely inefficient at conducting transactions and was a highly speculative asset.
Ether – a coin linked to the Ethereum blockchain, which often moves in tandem with Bitcoin – also fell more than 10% and last bought $ 1,613, down about 20% from the record high of the last week.
“They had a spectacular run and the abrupt overnight reversal is really not unexpected,” said Michael McCarthy, chief strategist at CMC Markets brokerage in Sydney.
“But because we’re so lacking in fundamentals, it’s the big numbers that turned out to be support and resistance points – so $ 50,000, $ 40,000 and $ 30,000 are the key levels on the chart right now. If we see it go to $ 50,000, sales could accelerate. “