Bitcoin Corrects after ATH and drops below US$64,000 in volatile crypto market
Bitcoin just underwent another of its infamous mood swings, shedding US$5,000 on March 5 shortly after reaching a new record high of US$69,200. This rollercoaster did not end there. In less than an hour, the cryptocurrency dropped by 6.7%.
Observers, attempting to remain calm despite the pandemonium, interpreted this as part of the crypto cycle. Vijay Boyapati stated on social media that it is common for Bitcoin to take a step down after reaching a high since significant players frequently sell off at these peaks. This decrease, however, is viewed as breaking a psychological barrier, paving the way for what is known as real price discovery.
CoinGlass revealed that almost US$150 million of Bitcoin was liquidated during this decline from a high of US$69,210. Despite the decline, long-term Bitcoin investors saw a silver lining, hailing this peak as the first of its sort, coming before the halving.
Experts, such as Rekt Capital, believe Bitcoin is entering a new phase, and it is moving quicker than projected compared to prior cycles. People are debating if such a quick climb before a halving is indicative of an accelerated cycle. With a market value of almost US$1.3 trillion, it is a major player in the US$2.6 trillion cryptocurrency industry. Everyone is wondering, “What’s driving Bitcoin now?”
Bitcoin, invented in 2008 by the enigmatic Satoshi Nakamoto, was intended as a cryptocurrency for direct internet payments that bypassed established financial institutions. Its unique blockchain technology, as well as the mining process that validates transactions, result in a secure, decentralized financial system. Is it appealing? Offering a mechanism to make transactions outside the control of banks, attracts individuals searching for alternatives to established financial institutions, particularly in a low-interest-rate climate when traditional investments are less appealing.
Despite its volatility, some perceive Bitcoin as a hedge against inflation, similar to gold, but not everyone is persuaded of its stability. The recent approval of ETFs tracking Bitcoin’s price indicates that the cryptocurrency sector has matured, drawing more institutional investors. However, the cryptocurrency sector is not without crises, as seen by the bankruptcy of major exchange FTX and the legal issues of important industry personalities.
