Three reasons for the sudden correction in Bitcoin

In 2024, massive interest in Bitcoin returned.

The value of Bitcoin has been experiencing several changes in recent days and, after reaching a historical record above US$73,000 last week, is facing “resistance” to resume the extraordinary gains of 2024. .

this thursday Bitcoin is trading at US$65,300 with an accumulated loss of 11% compared to the historical record of US$73,396. On 12 March. In any case, the main “crypto” has maintained a significant growth of $21,000 or 47% during 2024.

The dollar price of Bitcoin fell this Thursday.

Analysts are now wondering whether Bitcoin is facing a bullish run with prospects for near-term outperformance, or whether the surge has temporarily ended after topping itself just nine days ago.

1)Taking profits. The fact of surpassing the previous all-time high of US$69,000 in 2021, after a meteoric rise in the first quarter, could be a short-term exit signal for Bitcoin from general profit-taking. It should be kept in mind that this record comes with the largest unprecedented flow of investments into cryptocurrencies, which is a remarkable event for the digital financial sector with the approval of ETFs (exchange traded funds backed by assets). Continuous selling pressure in ETFs is currently limiting the upside potential.

Bitcoin’s evolution in the last month.

2) Stock market volatility. The correlation of Bitcoin’s price with stock market indicators is recognized, especially with the Nasdaq Technical Panel, although with a high beta (the coefficient that measures the riskiness of a title or price). When the Nasdaq rises, Bitcoin rises by a ratio of two or three with respect to that percentage. And when there are casualties, it also exaggerates them. This year got off to a great start for stock prices on Wall Street, with the Nasdaq up 11%, four times more than Bitcoin. At a time when analysts may be looking at overbought shares of the technology giant, this less positive outlook impacts Bitcoin projections.

3) Technical factors. Like any asset competing in the financial markets, virtual currencies are influenced by the projections of technical analysts, who can draw future projections relatively effectively, based on the verifiable behavior of prices in the past. In principle, despite the decline of the most popular cryptocurrency on the market, analysts believe that there are still several support points that prevent the currency from falling further. Market experts believe that if the price falls back into the channel, the situation may worsen, as the main virtual currency will find itself in a false breakout and as a result The level dropped to $60,000 per unit in the short run.

Bitcoin was the first cryptocurrency to enter the market, Created by Satoshi Nakamoto in 2008, this digital currency promoted a libertarian ideal and sought to challenge traditional monetary and financial institutions following the global financial crisis that year.

He Bitcoin (BTC) It uses cryptography to guarantee that its operations are not regulated by any banking institution or body, which in turn has put the currency in the middle of the debate regarding its volatility, as a third party is required. Not there. has been accused of promoting illegal activities such as fraud,

Despite skepticism, there are people who have chosen this virtual currency: El Salvador became the first country to adopt this cryptocurrency as legal tender on June 9, 2021, and prosperous Honduras, a Central American autonomous special region, did the same. Have done. Due to its capitalization level, this digital currency holds the position first position Among the most popular, with Total market cap $1.29 trillionPractically half the value of the entire “crypto” universe.

This occurred in a context where large-scale capital inflows into virtual currencies are taking place, which indicates Investor interest and confidence in these assets is increasing, Not only did Bitcoin benefit from the increase in price but… Positive impact on the cryptocurrency market In general, greater stability and visibility are favored, according to the analysis of bloomberg,

Experts attributed this growth to various factors, such as institutional adoption of cryptocurrencies, the search for investment alternatives due to global economic uncertainty, and continued innovation in the blockchain technology that underpins Bitcoin and other digital currencies. This combination of factors has created a favorable environment continuous growth In the value of bitcoin.

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