The price of Bitcoin has dipped to the $63,000 price, down from the record high of $73,000 price last week, sparking widespread selloff of crypto assets.
The sudden drop in price resulted in an 8% decline in total market capitalization within a 24-hour period as analyst point to a shift in investors sentiment as a potential catalyst.
The decline in the price of Bitcoin dragged other cryptocurrencies lower, as Ethereum lost more than 5% and is recently trading at $3,281 as at the time of writing this report, after hitting the $4,000 price list week for the first time since December 2021.
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The price of Solana dropped below the $190 after extending higher than $200 on Tuesday. The Solana price slumped by 7.69%, settling at $187.16. On the contrary, SOL witnessed a 8.42% hike in trade volume to $11.60 billion in the last 24 hours.
Meanwhile, the Binance Coin (BNB) price was down by 6.69%, reaching $529.12. In contrast, its 24-hour trade volume gained by 12.36% to $4.09 billion. Whilst, the XP price continued dropped to the $0.60 level. The XRP price recorded a dip of 2.50%, reaching $0.6065. On the contrary, XRP’s trading volume spiked 85.67% to 3.32 billion.
Bitcoin price decline began last week as traders began taking profits after it had soared roughly 70% from the start of the year to its peak last Wednesday. Data from CryptoQuant shows a massive spike in investors selling their bitcoin at a profit on March 12.
Additionally, that profit-taking led to a spike in long liquidations of leveraged bitcoin positions. About $122 million in long liquidations occurred across centralized exchanges Monday, according to Coin Glass.
The successful introduction of spot bitcoin ETFs in the U.S. earlier this year has been a key contributor to bitcoin’s rally, which began even before the ETFs were launched in anticipation of their regulatory approval. At the same time, interest from investors and higher demand for bitcoin has also led to increased leverage and heightened high-frequency volatility.
Meanwhile, data shows that Monday saw a significant outflow from the Grayscale Bitcoin ETF, a major investment vehicle for institutional investors. This outflow, coupled with lower-than usual inflows in other ETF products suggests a potential pullback from some investors. On-chain analysis from CryptoQuant observed increased selling pressure, possibly fueled by short-term Bitcoin holders causing out profits.
Looking ahead to 2024, despite the recent price fluctuations in the crypto market, several analysts maintain a bullish stance on Bitcoin’s prospects, anticipating a price recovery to the upside.
Investors and analysts have however cautioned traders to tread carefully in March, citing heightened volatility and increased trading volumes that may prompt pullbacks from Bitcoin’s long-term uptrend.