Bitcoin slides sharply after record high of $ 34,800
Bitcoin fell sharply on Monday, losing ground from an all-time high of $ 34,800 (roughly Rs. 25.4 lakhs) touched a day earlier, with traders citing volatility in highly leveraged futures markets.
Bitcoin fell more than 14 percent after previously touching as high as $ 33,670 (roughly Rs. 24.6 lakhs), erasing more than half of its 20 percent increase since New Year’s Eve to a record high of $ 34,800 (roughly Rs. 25.4 lakhs) on Sunday.
Bitcoin was last down 9 percent to $ 30,077 (roughly Rs. 21.9 lakhs).
A running cryptocurrency The derivatives market has developed since 2017, and offshore exchanges continue to offer operations with a high level of leverage. Movements in such markets can have a huge effect on the price of Bitcoin.
“It’s the reduction of some of that leverage,” said Richard Galvin of the crypto fund Digital Asset Capital Management.
Bitcoin’s record came less than three weeks later crossed $ 20,000 (approximately Rs. 14.6 lakhs) for the first time, on December 16th. The world’s largest cryptocurrency quadrupled in price last year.
Traders said that Bitcoin’s slide on Monday was not unusual for the volatile asset, whose strong price swings have partly prevented it from being widely used as a currency.
“It remains an inevitably volatile asset by its nature,” said Joseph Edwards of cryptocurrency brokerage Enigma Securities.
“For the most part, this looks like a purely technical move, signaled and caused by a short-term euphoria,” he added.
Fueling Bitcoin’s rally has been the perception that it can act as a hedge against inflation risk as governments and central banks turn on the stimulus taps to counter the economic impact of the COVID-19 pandemic.
“Some of this reflects the fear of a weaker dollar,” Bank of Singapore currency analyst Moh Siong Sim said of his latest rally.
Bitcoin’s advance has also reflected expectations that it will become a mainstream payment method. Its quick profit potential has also attracted demand from larger US investors.