Bitcoin Price Tumbles Below $70,000. It Isn’t Another Crypto Correction.
and other cryptocurrencies dropped below key levels on Monday in a selloff that could have been due to a lack of liquidity over the long Easter weekend. It doesn’t look like another correction of the scale that hit crypto in recent weeks.
The price of Bitcoin has fallen 1% over the past 24 hours to around $69,800, tumbling swiftly from above $71,000 to a trough below $68,000 in a matter of hours. The largest digital asset continues to hold around the psychologically important $70,000 level and firmly below its record high near $74,000 reached in mid-March.
The recent selloff can likely “be explained by reduced liquidity due to the Easter weekend,” said Alex Kuptsikevich, an analyst at broker FxPro. “We still see the dips to just below $69,000 as a post-growth consolidation—an important stage before a new advance. However, we have already seen several false starts, so it is better to wait for confirmation that Bitcoin has…the ability to grow above $71,500.”
Bitcoin needs a catalyst to get it firmly over the hump around $70,000 or make a record high. After reaching its peak in March, cryptos suffered a weeklong volatile selloff amid signs of profit-taking. While tokens sold off rapidly on Monday, the scale was far milder, and this does not look like another correction.
Support for digital assets continues to come from spot Bitcoin exchange-traded funds (ETFs), which were approved by U.S. regulators in January and have ushered in a fresh wave of investor interest in cryptos and billions of dollars of inflows. Bitcoin’s looming halving also looms this month, with the issuance of new tokens set to be cut in half, tightening supply and supporting prices at a time when demand has been rising.
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Bitcoin’s correlation to other risk-sensitive assets—namely, stocks—means that wider market catalysts are also key. The
and
stock indexes are themselves at record highs and face a busy week of economic data that could advance expectations over the pace of interest-rate cuts from the Federal Reserve. This macro outlook is important for Bitcoin.
Beyond Bitcoin,
—the second-largest crypto by market value—fell 2% to $3,550. Smaller tokens or altcoins were weaker, with
and
down 3% each. Memecoins were more mixed, with
up 1% and
shedding 5%.
Write to Jack Denton at jack.denton@barrons.com
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