Bitcoin fell sharply on Monday, losing ground from a record high of $ 34,800 (about Rs 25.4 lakh) a day earlier, with traders touching down a day earlier citing volatility in highly leveraged futures markets.
After touching a high of $ 33,670 (about Rs. 24.6 lakh) before bitcoin fell more than 14 percent, breaking its 20-percent rally record on New Year’s Eve to reach $ 34,800 (about Rs. 25.4 lakh). Gone.
Bitcoin was down 9 percent at $ 30,077 (about Rs 21.9 lakh).
A working cryptocurrency derivatives market has developed since 2017, with offshore exchanges still offering highly leveraged trading. There may be an external impact on the price of bitcoin in such markets.
“It’s overlooked some of that leverage,” said Richard Galvin of digital asset capital management, a crypto fund.
Bitcoin first came on December 16, less than three weeks after crossing the record high of $ 20,000 (about Rs 14.6 lakh). The world’s largest cryptocurrency more than quadrupled in price last year.
Traders said the decline of bitcoin on Monday was not uncommon for a volatile asset, part of which wild price swings prevented it from being widely used as a currency.
“It is still an unavoidable volatile asset by its nature,” said Joseph Edwards of Engama Securities, a crypto brokerage.
“For the most part, it looks like a purely technical move, indicated and caused by short-term enthusiasm,” he said.
Bitcoin’s notion of fueling is the assumption that it can act as a hedge against inflationary risk as governments and central banks turn on incentive taps to counter the economic impact of the COVID-19 epidemic.
Bank of Singapore currency analyst Moh Siong Sim said it reflected fears of a weaker dollar.
The advance of bitcoin has also reflected expectations that it will become a mainstream payment method. Its potential for quick gains has also attracted demand from large US investors.
© Thomson Reuters 2020
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