Bitcoin briefly dips below $63,000 after hitting $73,000 last week

Bitcoin extended its slide on Tuesday, falling more than $10,000 at one point from its all-time high last week.

The leading cryptocurrency was last down 4% at $64,440.14, according to Coin Metrics. It earlier fell to $62,320.30 after hitting a record high of $73,679 last week.

“As ETFs buy up the available supply of Bitcoin on the open market and continue to reduce liquidity, these events may become more frequent and may cause people to lose faith in the integrity of Bitcoin’s pricing and start looking further afield” to other crypto assets, said Bartosz Lipinski, CEO of Cube.Exchange.

The move helped lower other cryptocurrencies. Ether lost more than 4% and recently traded at $3,335.66, after breaking above $4,000 last week for the first time since December 2021 — a decline that some analysts had predicted following Dencun’s network upgrade. The token associated with Solana fell by 8% and dogecoin lost 5%.

Crypto-related stocks pared earlier losses but remained under pressure. Bitcoin proxy Micro strategy fell 5% while the crypto exchange Coinbase fell by 4%. Mining stocks were initially lower across the board, but some turned positive. the biggest, Riot Platforms and Digital marathonrespectively by 3% and 0.5%.

“Overall, it would make sense for this pullback to be short-lived and the rally to resume — although the specter of a recession next year looms over markets and could dampen the rally in ways we may not be able to predict,” Lipinski said.

Bitcoin’s weakness began last week as traders began taking profits after it jumped roughly 70% year-to-date to its peak last Wednesday. Data from CryptoQuant shows a huge spike in short-term holders selling their bitcoins at a profit on March 12.

Additionally, this profit-taking led to a spike in long liquidations of leveraged Bitcoin positions. About $145 million in long liquidations occurred on centralized exchanges in the past 24 hours, and $122 million on Monday, according to CoinGlass. Last week, there were about $372 million in long liquidations from Wednesday through Friday.

The successful introduction of spot bitcoin exchange-traded funds in the US earlier this year was a key factor in bitcoin’s rally, which began even before the ETFs were launched pending their regulatory approval. At the same time, investor interest and greater demand for Bitcoins also led to increased leverage and increased high frequency volatility.

Investors and analysts warned that traders should be cautious in March, as more volatile price action combined with increasing trading volumes could lead to a pullback from bitcoin’s long-term uptrend.

Chart watchers mostly say Bitcoin is on its way to new highs, but it could also see sharp corrections along the way.