Bitcoin (BTC) plunged below the psychologically critical $51,000 level in 24 hours, and an analyst thinks that a bumpy road lies ahead for the crypto.
The world’s most sought-after digital token in terms of market capitalization hit an intraday low of $50,856.55. As of this writing, bitcoin was 0.50% lower at $52,019.03.
Despite still-rising institutional adoption, bitcoin tanked late Thursday as analysts warn that massive volatility is in the offing, pushing the crypto’s losses to almost 15% since it registered an all-time peak earlier this month.
BTC market cap falls
According to CoinMarketCap, as of 11 a.m. EDT, the price of BTC fell 9.5% over the past 24 hours, dragging down its market valuation to around $970 billion, from a little over $1 trillion at the same time Wednesday.
The price of BTC had struggled at a time when it was expected to be performing well. For one, Fidelity has filed for a BTC exchange-traded fund with the U.S. Securities and Exchange Commission.
If approved, the fund will be a more affordable option for institutional investors to pour their money on Bitcoin. The crypto, therefore, likely retreated because of investors who were disposing of their Grayscale Bitcoin Trust holdings in anticipation of the ETF.
Analysts expect downward trend
Also, bitcoin weakened even after Tesla Inc announced it would enable customers to buy its electric cars using the currency. While this was positive news, it was already priced-in since Tesla has already committed itself to begin accepting the token.
“This is a time to make sure that you have some dry powder and are not overextended,” CoinDesk quoted Chad Steinglass, director of trading at CrossTower, as saying in an emailed statement.
Bitcoin has not changed hands under the $50,000 level since March 8 — well off the digital asset’s all-time peak above $61,000. Analysts expect the downwards trajectory to continue and are cautioning that bitcoin may move past the $50,000 mark.
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