Crypto, Currency

Bitcoin tumbles 17% as doubts grow over valuations

Bitcoin dropped below $50,000 as investors began to get a little nervous about the digital currency’s lofty valuation and some leveraged players took profit

2/23/2021 1:57:00 PM

Bitcoin dropped below $50,000 as investors began to get a little nervous about the digital currency’s lofty valuation and some leveraged players took profit

Bitcoin tumbled 17% on Tuesday, sparking a sell-off across cryptocurrency markets as investors grew nervous at sky-high valuations and leveraged players took profit.

The world’s biggest cryptocurrency suffered its biggest daily drop in a month, falling as low $45,000. Bitcoin was last down 11.3% at 0939 GMT.The drop extended a slump of nearly a fifth from a record high of $58,354 hit on Sunday - though bitcoin remains up around 60% for the year.

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“The kinds of rallies we’ve been seeing aren’t sustainable and just invite pullbacks like this,” said Craig Erlam, senior market analyst at OANDA.Ether, the world’s second largest cryptocurrency by market capitalisation that often moves in tandem with bitcoin, also dropped more than 17% and last bought $1,461, down almost 30% from last week’s record peak.

Cryptocurrency markets have been running hot this year as big money managers and companies begin to take the emerging asset class seriously, piling money into the sector and driving confidence among small-time speculators.A $1.5 billion investment in the crytocurrency by electric carmaker Tesla this month has helped vault bitcoin above $50,000 but may now lead to pressure on the company’s stock price as it has become sensitive to movements in bitcoin.

Rising government bond yields over recent days have hit riskier assets, spilling over into leveraged bitcoin markets, said Richard Galvin of crypto fund Digital Asset Capital Management.“Markets were quite hit from a leverage perspective so that didn’t help,” he added.

U.S. Treasury Secretary Janet Yellen, who has flagged the need to regulate cryptocurrencies more closely, also said on Monday that bitcoin is extremely inefficient at conducting transactions and is a highly speculative asset.Critics say the cryptocurrency’s high volatility is among reasons that it has so far failed to gain widespread traction as a means of payment.

Analysts said key price levels have played a large part in determining the direction of crypto markets.“Because we’re so lacking in fundamentals, it’s the big figures that have proved to be support and resistance points,” said Michael McCarthy, chief strategist at brokerage CMC Markets in Sydney.

“$50,000, $40,000 and $30,000 are the key chart levels at the moment. If we see it heading through $50,000, selling could accelerate.”Reporting by Tom Westbrook; Editing by Jacqueline Wong and Nick Macfie Read more: Reuters Top News »

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haha took profits? Leveraged woke up REKT!! Yep, being influenced by the likes of musk. There were definitely a lot of losers who took a hit with Bitcoin, but ElonMusk certainly crowned himself king of the winners in this game due to his mega cash in this, talking it up the stage, only then to talk it down again!

Elon must be taking profits after driving it up. In other words, business as usual Maybe because you are fueling the doubts? Bitcoin The big sharks probably cashed out at its peak. So when it crashes everyone who bought it at its peak will go homeless and while the likes of Tesla will enjoy the tax free profits of billion dollars Bitcoin

Hopefully it will crash to $ 0 For all those who are new to this working from home Bitcoin trading options Here's a little tip: Get a trusted Bitcoin expert and stick to her lisaMakT Invest and play at similar times each day. Because : In times of chaos, your investment is your anchor to success⚖️ Check the price again in 2 months, what is happening to Bitcoin it's a normal thing before another trip to 100k.

MatHill1 📉 'Sell!! Sell!! Sell!!' 'Start those machines back up!!' In plain English: those at the top of the pyramid are getting out before it collapses. Or in even plainer English: we had the pump, now comes the dump. You're making up things here. It's not a worry on the valuation... It's because Bitcoin has those episodes of moving lower that its growth is actually fair. Not like stocks which are only going up because of artificial pump from the Fed...

'a little nervous'... 😅😅 As the saying goes 'When the tide goes out we will see who is naked' or, in other words, 'Start wearing your shorts'! bull run is over? The game the play the currency that can be trolled back and forth. Play with fire, you get burnt really badly. 'some leveraged players took profit' Yeah, you could frame it that way I guess. 👀 I think they just got forcefully liquidated instead.

The doubts comment can only be accurate if it doesn't grow - a drop like this is normal and the profit taking comment likely the cause.