Why has bitcoin dropped sharply?

BitXmi experts named the reasons that contributed to the fall in the value of the main cryptocurrency to a two-week low of $ 53 thousand.

Over the past day, the cost of bitcoin on the Bitxmi crypto exchange dropped by 8%, to a two-week low of $ 53 thousand. At the time of this writing, the price of the main cryptocurrency is $ 55.1 thousand.

Cryptocurrency quotes began to decline sharply on March 20, after they could not overcome the $ 60 thousand mark. A week earlier, the asset set a historical maximum value above $ 61.8 thousand.

Bitcoin is already trading at the maximum historical levels, so it is not surprising that the holders of large portfolios prefer not to wait for a further increase, and partially fix their profits, analysts say. Now there is a quite expected and classic situation on the market: large investors will come out of the situation in the black, fixing profits thanks to small and medium investors.

Technical nature

The current decline in bitcoin is more of a technical nature than fundamental, according to analysts at BitXmi. The current decline in quotations for the main cryptocurrency could occur against the background of a weak market reaction to the statements of the head of the US Federal Reserve, Jerome Powell.

“Powell did not bring anything new to the position of the US official authorities. However, he made a reservation that bitcoin “is rather a substitute for gold, not a dollar,” which plays a plus for the main cryptocurrency, ” – experts add.

Also, do not forget about the situation on Turkish cryptocurrency exchanges, where the cost of bitcoin was approaching $ 100 thousand due to the fall in the lira exchange rate. (Read more here). This proves Bitcoin’s ability to be an effective defensive asset.

The potential is exhausted

Bitcoin has largely exhausted its short-term potential, and now the asset needs some additional powerful drivers for growth, but now there are no such drivers. It’s worth noting that the main cryptocurrency is already trading above the most optimistic forecasts made last year.

“Few thought that at the beginning of 2021 Bitcoin would be able to touch up to $ 60 thousand. Up to $ 35-40 thousand – yes, but up to $ 60 thousand – it was a nice bonus for holders,” – the analysts concluded.

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