Bitcoin cracks 14% to break below $45,000 as crypto selloff gathers pace
Bitcoin continued to fall on Friday with prices breaking below the $45,000 level for the first time in 15 days as experts said the recent sharp rally in the world’s biggest cryptocurrency to the $58,000 zone looked overstretched.
The digital currency moved in a wide range of $51,982.84-44,537.65 over the last 24 hours, as per cryptocurrency tracker CoinGecko. It had last traded below the $45,000 level on 11 February 2021.
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Fuelled by interest from major corporations such as Tesla and MicroStrategy, bitcoin had hit its all-time high level of $58,640.77 on 21 February. However, it has fallen by around 21% since then.
Meanwhile, MicroStrategy, which is one of the earliest institutional investors to have forayed into the crypto market, said they were planning to push an additional $2.17 billion into bitcoin, taking the total investment to 90,531 bitcoins in their reserve.
According to David Lifchitz, chief investment officer for Paris-based quantitative trading firm ExoAlpha, a correction in bitcoin cannot be ruled out. “$50,000 looks like the first stop for a mild pullback, but a second leg down could take it down to $40,000, while the $30,000 zone looks like the ultimate bottom should things turn ugly in the short term," CoinDesk had reported Lifchitz as saying.
The prices of other cryptocurrencies have also come under selling pressure in the recent past. The world’s second biggest cryptocurrency, ethereum, was trading at $1,469.88, down 8.2% at around 2.40pm IST. The digital asset is down around 28% from its all-time high of $2,042.93 hit on 20 February.
Meanwhile, crypto industry professionals in India remained positive on bitcoin
“While the prices fluctuated, it is heartening to see that the enthusiasm among investors and established players had not waned. In the past week alone, Jack Dorsey, the CEO of Twitter and Square Cash app, announced that Square Cash had purchased nearly $170 million worth of investment in bitcoin,” said Sumit Gupta, CEO and co-founder, CoinDCX.
According to experts, despite fears of a ban on private cryptocurrencies, prices of all cryptocurrencies in the Indian market was back at a premium of 3-5% compared with their international market equivalents. Notably, bitcoin and ethereum had slipped into a discount of up to 20% against global prices soon after the talks of ban had first surfaced in late January.
“It was an important week for crypto. We saw bitcoin price soar to a point where the price of one bitcoin was equal to one kg of gold. These developments show how the world is looking at bitcoin as the new digital gold. The world is moving fast in embracing crypto. It’s in India’s best interest to regulate crypto and stay competitive with the rest of the world. This will also encourage large institutional players in India participate in crypto," said Nischal Shetty, CEO, WazirX.
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Crypto Crash Intensifies as Bitcoin Drops 10%
Bitcoin, the world’s largest digital currency, lost around 10% of its value on Friday after the panic among retail traders triggered a $100 billion sell-off in the crypto market. As of writing, BTC is trading near $45,500 with a total market cap of $850 billion.
The cryptocurrency market lost nearly $400 billion during the last 5 days. The total value of cryptocurrencies reached an all-time high of $1.75 trillion on Saturday after Bitcoin and Ethereum registered record highs. The crypto market reached a low of $1.37 trillion on Friday.
According to the latest data published by crypto analytics firm Bybt.com, around $900 million worth of long cryptocurrency positions got liquidated in the last 24 hours as Bitcoin and Ethereum lost nearly 10% of their values in a single day. Approximately 142,000 crypto traders were liquidated during the last 24 hours.
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Despite the positive news regarding the institutional adoption of Bitcoin and other digital currencies, the crypto market remained in a downtrend during the last 5 days. MicroStrategy, the world’s largest business intelligence firm, announced earlier this week that the company has purchased more than $1 billion worth of Bitcoin to increase its BTC holdings.
Market Correction?
Major institutional holders termed the recent downtrend as a healthy correction for the cryptocurrency market and an opportunity for new traders to enter the market but the high volatility and limited liquidity have raised concerns about the overall growth of digital assets. Bitcoin has now lost more than $200 billion of its market cap in the last few days. Bitcoin’s current market dominance stands at around 61.7%. Ethereum remained the worst-performing crypto-asset among the top 5 as ETH lost more than 25% of its value in the last 5 days. ETH crashed from a high of $2,020 to as low as $1,450 within this week. As of writing, the world’s second-largest crypto asset is hovering around $1,475 with a total market cap of $169 billion. Tether is the third-largest cryptocurrency with a market cap of $35 billion.