Bitcoin It fell further on Wednesday, briefly falling below the $61,000 level in a volatile trading session as the cryptocurrency attempted to mount a rebound.
At around 07:20 a.m. EDT, bitcoin rebounded again to trade at just over $63,900, up about 1% from the previous 24 hours, according to CoinDesk data. Earlier on Wednesday, Bitcoin reached an intraday high of $65,716.
Bitcoin has had an excellent performance and has risen by 124% in the past year. The world's largest cryptocurrency hit a record high of just under $73,800 last week.
The price of the cryptocurrency was supported by the launch of Bitcoin exchange-traded funds in the US in January, as well as by the upcoming halving – an event written in Bitcoin's code, which effectively slows down the supply of the digital currency on the market. . Historically, halving has supported prices.
However, the value of all existing cryptocurrencies has declined since Bitcoin reached its all-time high, falling by $200 billion as of Wednesday morning, according to data from Coinmarketcap.
The entire cryptocurrency market has lost about $370 billion in value since Bitcoin reached its all-time high, as has happened with other digital assets such as ether And Solana It also decreased sharply.
Part of the decline was likely profit-taking after the sharp rise in cryptocurrencies.
Data from CryptoQuant shows a massive spike in the number of short holders selling their Bitcoin at a profit on March 12.
“We've seen pullbacks of 20-30% in previous Bitcoin bull markets as a normal occurrence when things start to heat up. We've certainly had several signs over the past week that things are heating up a little,” said Vijay Aiyar, Vice President of Bitcoin. International markets and growth in cryptocurrency exchange CoinDCX, CNBC reported.
Some momentum has emerged from Bitcoin ETFs, which recorded a total of $154.4 million in net outflows on Monday, according to BitMEX Research. This was the first time that ETFs recorded net outflows since March 1.
Grayscale Bitcoin Trust, or GBTC, recorded outflows of $642.5 million, according to BitMEX research, while other ETFs recorded modest or flat inflows.
GBTC has been criticized for its higher than average fees. However, Grayscale CEO Michael Sonnenshein told CNBC earlier this week that the cryptocurrency fund manager expects to reduce fees on its Grayscale Bitcoin Trust ETF in the coming months.
Aiyar said that if Bitcoin falls below the $60,000 threshold, the cryptocurrency may weaken further to test the $50,000 to $52,000 level, “which will be our line in the sand for this bull market to continue moving forward.”
CNBC's Tanaya Machel and Ryan Brown contributed to this report.
