BITCOIN fell for the first time in eight trading sessions as speculators sought a respite following the recent rally that pushed the largest cryptocurrency beyond US$50,000 for the first time in more than two years.
“Bitcoin has gained 10 per cent over the last five trading sessions and 15 per cent the last month,” said Teong Hng, chief executive at Hong Kong-based crypto investments firm Satori Research. “Hence speculators are taking some chips off the table. I expect the correction to be shallow, and 45k to provide solid support for BTC.”
The original digital asset fell as much as 2.8 per cent to US$48,450 on Tuesday, and is still up around 16 per cent this year.
The latest rally has been driven by optimism that last month’s US approval of spot Bitcoin exchange-traded funds is leading to greater mainstream acceptance.
“There is some profit taking, 50k is a significant number psychologically, and traders are still trying to divine how the ETF approvals will play out,” said Michael Safai, founding partner at quantitative trading firm Dexterity Capital.
Nine US spot Bitcoin exchange-traded funds debuted on Jan 11, while the more than decade-old Grayscale Bitcoin Trust converted into an ETF the same day. The accessibility of ETFs promises to widen the investor base for the token. The new funds have attracted in excess of US$9 billion so far, while a more than US$6 billion outflow from the Grayscale fund since its conversion appears to be losing steam. BLOOMBERG