Bitcoin's record-breaking rally may have run out of steam

Bitcoin's record-breaking rally may have run out of steam

Bitcoin price plunged almost 20% in the past 24 hours as the price dip created panic among retail and institutional investors.

Such losses stunned many crypto traders and investors who overleveraged on the prevailing bullish trend in the Bitcoin market.

While the number of wallets with smaller balances decreased as BTC/USD climbed from $19,000 on December 1 to recent highs of $42,000, the 1,000 BTC+ group became an outlier, growing in presence. The executive also noted that Guggenheim "made the decision to start allocating toward bitcoin when bitcoin was at $10,000".

After the record-high, the price and the trading volume dipped a little. According to the SEC document, Guggenheim's request would become effective on January 31st, 2021. The price of the world's largest cryptocurrency reached as low as $32,000.

Messari co-founder Dan McArdle found that Bitcoin outperformed everything over the last ten years.

BTCUSD TradingView
BTCUSD TradingView

Naeem Aslam, the chief market analyst at AvaTrade, commented on the cryptocurrency: "A major price level has been hit and bitcoin has proved that this is not the asset class you want to mess around with". "While it may mature in the future, Bitcoin as it exists is largely a speculative asset".

Other's don't seem particularly impressed by any of this, as they see nothing particularly new here, claiming that institutions are doing what they've always done, "call insane targets" when they want to sell, say it's overpriced when they want to buy - "first sell, then give out a byte that creates fud, and when the markets trend lower, buy again", as a commenter said.

In point of fact, Bitcoin, the world's largest crypto asset with a market share of 69 per cent, opened up the day sharply lower after a raft of investors had warned of a sharp correction followed by a $40,000-milestone, while the digital asset which had rallied as much as 1,000 per cent since hitting a record low of $3,000 in March a year ago, plunged to as low as $36,618.36 on Bitstamp exchange earlier in the day. Crypto volatility has jumped after the recent crash.

In the past 24 hours, 245,092 trading positions, worth Dollars 2.56bn were liquidated, according to bybt.com data.

The total market cap of cryptocurrencies reached as low as $890 billion today following a 20% crash.

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