Bitcoin continues its decline for the third day in a row, reaching $63,000

The price of Bitcoin is shown at the Pubkey Bar on February 29, 2024 in New York City.

Michael M. Santiago | Getty Images

Bitcoin fell on Wednesday for a third day in a row as the cryptocurrency retreated from its last run in this year’s rally and investors awaited the conclusion of the Federal Reserve’s latest meeting.

The price of the leading cryptocurrency was last down 1.6% to $63,603.00, according to Coin Metrics. It fell to $60,793.60 in overnight trade. Wednesday was also the third day in a row that bitcoin lost more than $1,000, a streak that bitcoin has not seen since June 2022.

Bitcoin is down 12% in the past week after hitting an all-time high of $73,797.68 last Thursday. It’s still up almost 50% for the year.

“The ETF-led rally has — at least temporarily — stalled as net inflows began to slow,” Citi’s Alex Saunders said in a note on Wednesday. “Total inflows have hit $12 billion since the start, but the slowing pace likely contributed to weaker price action after Bitcoin recently hit new all-time highs.”

“Higher-frequency crypto volatility eased as futures rates began to normalize, meaning less demand for leveraged crypto exposure,” he added. “However, open interest and volumes remain high.”

Other cryptocurrencies fell with Bitcoin. Ether was down more than 1% to $3,297.11 after topping $4,000 last week. XRP fell 3.5% and the Shiba Inu coin lost 3%. The token associated with Solanawhich benefited from the recent meme coin rally, tumbled more than 6%.

However, crypto stocks fared better. Coinbase grew by 4%. Micro strategy was unchanged after falling about 20% earlier this week. In the mining sector, Iris Energy and CleanSpark have won 13% and 8% respectively. Digital marathon added 8.5% and Riot Platformswhich JPMorgan upgraded Wednesday to overweight from neutral, added 6%.

Bitcoin’s recent weakness began last week when 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. That profit-taking led to a spike in long liquidations of leveraged bitcoin positions that continued into early this week, according to CoinGlass.

“We’ve seen 20-30% pullbacks in previous Bitcoin bull markets as a normal occurrence when things start to heat up. And we’ve definitely had a lot of signs over the past week that things are heating up quite a bit,” Vijay Aiyar, vice president of international markets and growth at crypto exchange CoinDCX, told CNBC.

Some momentum came from bitcoin ETFs, which recorded a total of $154.4 million in net outflows on Monday, according to BitMEX Research. It was the first time ETFs have recorded net outflows since March 1.

Grayscale Bitcoin Trust, or GBTC, recorded $642.5 million in outflows, according to BitMEX Research, while other ETFs posted modest or flat inflows.

GBTC has been criticized for its higher than average fees. However, Grayscale CEO Michael Sonnenschein told CNBC earlier this week that the crypto fund manager expects to lower fees on its Grayscale Bitcoin Trust ETF in the coming months.

Aiyar said that if Bitcoin falls below the $60,000 threshold, the cryptocurrency could weaken further to test the $50,000 to $52,000 level, “which will be our line in the sand for this bull market going forward.” .

CNBC’s Ryan Brown contributed to this report.

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