Flagship crypto, Bitcoin, lost about $7,000 after hitting its all-time high of $61,683, as wealthy investors took some profit off the table.
At the time of writing this report, Bitcoin traded at $54,300.01 with a daily trading volume of $71. Bitcoin is down 10% for the day. The current market value of the world’s flagship crypto hovers at around $1.013 billion.
A renowned market expert from the world’s most valuable bank points out why Bitcoin bulls seem to be suffering from exhaustion as the flagship crypto retail investors have picked up the slack amid an apparent plunge in institutional inflows so far this quarter, according to a report by JPMorgan strategist, Nikolaos Panigirtzoglou.
According to data released by JP Morgan Chase, retail investors bought about 187,000 bitcoins so far this quarter, compared to roughly 172,684 by institutional investors when using Square and Paypal data as a proxy.
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Stimulus money some days ago started hitting accounts of American citizens as that revealed Bitcoin burst higher but short-term price action reveals it’s extremely bearish now.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics gave key insights into why the sell-off is showing a high prevalence
“There were also aggressive attempts to tweet Doge higher and that coin is lower too, so it seems like there is negative momentum in the crypto space for those with a tactical time horizon.
READ: $128 million worth of Bitcoin exchange hands, Bitcoin drops to $36,100
“This failure to hold gains is worth keeping an eye on as increased mobility could be a game-changer
But the sell-off may indicate that either:
A) expectations for risky asset purchases with stimulus check money could be overdone or
B) a good chunk of the money is going to be used to pay down tax liabilities or
C) newly printed cash will find its way into the real economy now that restaurants, Vegas, and beaches are reopening
For many retail cryptocurrency traders, Bitcoin was the bread-and-butter trade of the pandemic.
READ: $90 billion wiped off in Crypto market as Bitcoin tumbles by 5%
“Bitcoin has maintained an amazingly bullish trend that has made most winners,” said Ed Moya, senior market analyst at Oanda Corp to Bloomberg. “Retail traders got reinvigorated with the latest NFT buzz, and as the stimulus checks hit their bank accounts.”
It’s important to note the world’s flagship crypto has gained about 990% in the past year, so profit-taking at this stage seems to be a normal scenario on the account that some institutional investors are pulling out some of their gains.