Bitcoin fell south of $60,000 after approaching $64,000 (Photo by Michael Nagle/Getty Images)
Bitcoin prices continued their roller-coaster ride this afternoon, approaching $64,000 and then falling back below $60,000 following this run-up.
The world’s most valuable digital currency by total market capitalization declined to $59,898.11 around 1:30 p.m. EST, CoinMarketCap figures show.
It dropped to this level after rising to roughly $63,735.00 around 12:15 p.m. EST, additional CoinMarketCap data reveals.
When asked to explain this afternoon’s pullback, analysts repeatedly singled out profit taking.
In response to whether this particular activity was the culprit, analyst Tim Enneking replied “Absolutely! Plus, frankly, BTC had moved much too far much too soon.”
“This consolidation around $60k is exactly what is needed after such a massive move up,” Enneking, managing partner of Psalion, added via emailed comments.
“It also is laying the groundwork for a new ATH which, after today’s fireworks, is at the forefront of everyone’s mind!” he said, shedding further light on the situation.
Aaron Golbin, managing partner at LvlUp Ventures, offered a similar take on the matter.
“Yes, I believe that profit taking led to this pullback,” he stated through email.
“After large spikes in price over short periods of times, equity or commodity holders seek to realize their gains, at least in part,” said Golbin.
“Some of these holders are traders looking to follow trends or increase their profits in the hopes they’ll sell high and buy low.”
Julio Moreno, head of research for CryptoQuant, also chimed in, stating via Telegram that profit taking was the primary cause of today’s price decline “given that unrealized profit margins for traders are now close to extremely high levels.”
When mentioning these margins, Moreno cited figures in a CryptoQuant weekly report that was published today.
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, also offered his take on the matter.
“We expect to see profit taking at multiple points, but we also expect to see Bitcoin’s price rise over time as it has throughout the years,” he stated via emailed comments.
“While we may soon be at all time highs for Bitcoin, new highs are the norm for experienced Bitcoin investors,” said DiPasquale.
“In the past, we have seen pull-backs at all time highs with round numbers, such as when Bitcoin hit $20k in Dec 2017,” he noted.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
