The price of bitcoin has seen a one-way linear rise since April as abundant global liquidity and interest from institutional investors saw the cryptocurrency surge nearly 700 per cent from April till its recent lifetime high of over $40,000.
Although, there were no evident triggers for the sudden sell-off in Bitcoin, some traders pointed to the pullback in the US dollar index earlier today as signs of risk aversion creeping into investors globally.
The US dollar index, also known as the Dixie index, was trading near the day’s high of 90.66, up 0.6 per cent as short covering by some investors who had taken bearish positions on the currency were covered.
Market participants also said that the crypto currency was likely witnessing a major profit booking event given the low volumes.
Bitcoin’s market capitalisation crashed to less than $600 billion after touching a high of $780 billion on Friday.
On cryptocurrency exchange Wazir X, a Bitcoin was trading at $33,391, down 16.2 per cent.