Bitcoin is currently trading around 45% below its all-time high of $68,700.
The world's largest cryptocurrency by market capitalization began falling around 19:00 UTC (2 p.m. ET) on Thursday, following a lead in the equity market, in which the U.S. A sharp drop was observed at 4 o'clock. Close it
This is what analysts say behind the drop in prices:
1. Negative Market Sentiment
The decline in the price of Bitcoin (BTC) is a simple continuation of the same trend that has occurred over the past few weeks – negative market sentiment. "This sentiment has been fueled by disappointing news that affects any type of objective asset data," said Jason Dean, analyst at Quantum Economics. Although Dean has a positive long-term outlook, he feels that the current price action will continue in the immediate/short term, with further downside pressure possible. "Once the fear kicks in, it takes a while to break through and you just have to wait for surrender before going back into the "normalized" categories.
2. Leveraged Long Position
Another reason, according to Ben McMillan, founder of IDX Digital Assets, is leveraged long positions, which fueled the selloff at the Asian Open on Friday. “This is almost always the case with bitcoin,” said McMillan, who noted that “$40,000 was an important support that has now turned into a resistance level and we can certainly see more downsides over the weekend.”
3. BTC Moving In Conjunction With Traditional Markets
According to Lucas Outumuro, Head of Research at IntoTheBlock, bitcoin and the broader cryptocurrency market as a whole is acting as a high-sentiment beta asset – meaning that it is moving in tandem with the broader markets and the recent downside. more influenced by emotion. "Macroeconomic fears and poor tech company earnings have also exacerbated this correlation," Outumuro said.