The value of Bitcoin has experienced a significant decline, falling below the $61,000 mark in the early hours of March 20, as it continued to face a downward trend after achieving a record high in the previous week. Currently, the digital currency is trading around $62,824, as per Tradingview’s latest data.
Market Dynamics and Bitcoin’s Trajectory
In the past year, Bitcoin’s value surged by 124%, nearly breaching the $73,800 threshold last week. Its ascent was buoyed by the introduction of Bitcoin ETFs in the United States and anticipation of the forthcoming Bitcoin halving, which traditionally curtails the rate of new Bitcoin entering the market, historically boosting its price.
The entire cryptocurrency market has seen a downturn following Bitcoin’s peak, with a loss of around $210 billion in value as of March 20 morning. Other leading cryptocurrencies, Ethereum and Solana among them, have also witnessed substantial losses, contributing to a nearly $400 billion plunge in the market since its apex.
A factor in the market’s fall is attributed to investors cashing in on profits after the recent sharp price increases. On March 12, analytics from CryptoQuant indicated a rise in Bitcoin sales from short-term holders. Vijay Ayyar of CoinDCX noted the market’s overheat last week and suggested that corrections of 20-30% are common in heated Bitcoin bull markets.
Insights from Industry Experts
BitMEX Research has highlighted a net outflow of $154.4 million from Bitcoin ETFs on March 18, marking the first such instance since the beginning of March. Although Grayscale’s Bitcoin Trust saw significant outflows, other ETFs maintained stable or slight inflows. Grayscale has been criticized for high fees, but its CEO indicated potential fee reductions for its Bitcoin Trust ETF soon.
Considering the current market trend, Ayyar warned that if Bitcoin slips below the $60,000 support, it might test the strength of the $50,000 to $52,000 range, which is crucial for the bull market’s continuity.