Bitcoin's Price Drop: From Nearly 70,000 to 63,000 Dollar Amid Analysts' Calm

For the first time in more than two years, Bitcoin hit a new all-time high before trading quickly fell as investors tried to take advantage of their gains.

But the digital asset witnessed a big sell-off only hours after it peaked in the US on Tuesday at $69,191.95; as of 9:57 AM on Wednesday, India, it was down to about $63,591.

The volatility of Bitcoin is emphasized by these price swings. A number of factors have contributed to this year's extraordinary gain, including inflows into US-spot Bitcoin exchange-traded funds, a possible slowdown in the expansion of the token's supply, and speculative bets in futures markets.

Though investor holdings are now stretched as a result of this gain, there are worries about a possible downturn.

Assuming that Bitcoin prices continue to fluctuate within the $60,000 range, Stefan von Haenisch, head of trading at OSL SG Pte in Singapore, predicted that range-trading will likely occur for a few days at the very least.

Bitcoin's 50% Surge in 2024 Boosts Confidence in Digital Asset Market

Around $265 million worth of bearish bets and $880 million worth of bullish bets on cryptocurrency were sold in derivatives markets in the last 24 hours, according to statistics from Coinglass.

As von Haenisch pointed out, this total amount of more than $1 billion is the greatest since the pandemic-related boom in digital assets.

In 2024, Bitcoin has increased by 50% so far, surpassing gains in global markets, despite the recent decline. This has increased confidence in the digital asset market.

Over the same time frame, there has been a rise of more than 40% in the top 100 tokens as well.

Along with the fluctuations in Bitcoin prices, gold reached a new high on Tuesday, rising beyond $2,100 per ounce. Growing hopes for a US interest rate decrease in June were the driving force behind this rise.

According to Stuart Cole, chief economist of Equiti Capital, "Markets are now looking to hedge against increased risks and higher interest rates using cryptocurrencies as an alternative to using gold." "So, it's no surprise that when you see the gold price rallying, cryptos are doing the same."

Bitcoin's Scarcity Factor and Its Effect on Market Dynamics

The approaching halving event in April, which happens every four years and lowers the rate at which new tokens are distributed along with the incentives for miners, is partially blamed by analysts for Bitcoin's poor performance.

Since there are only 21 million Bitcoins available, 19 of those have already been mined, scarcity is still a major component in the price of the Cryptocurrency.

Bitcoin is still too unpredictable for many investors, even with its growing popularity, and it doesn't have many practical uses outside of speculation.

MicroStrategy and Reddit are two examples of businesses that have recently added cryptocurrency assets to their portfolios.

Furthermore, the market for stablecoins—like Tether—has expanded significantly, and the total amount of dollar-pegged stablecoins issued has surpassed $100 billion for the first time.

The second-largest cryptocurrency, Ether, is now trading at $3,486 but has not yet reached its previous record high. Tuesday witnessed a decrease in cryptocurrency equities, with shares of Marathon Digital, Riot Platforms, and Coinbase all seeing weaker trade.