Bitcoin experienced a rapid decline on Tuesday after hitting a new record high for the first time in over two years. The cryptocurrency soared to over $69,210 in early trading, as reported by Coin Metrics, before swiftly retracting. By late afternoon, the losses had deepened, with Bitcoin’s price declining by 8% to $61,973.37.
Despite its recent impressive performance, with a 45% increase in value so far this year, investors are warning of a potential cooling-off period as profit margins reach extreme levels. Ed Tolson, CEO and founder of the crypto hedge fund Kbit, cautioned that the market is primed for a significant correction, possibly in the range of 10% to 20%. He highlighted the risk of cascading liquidations on crypto perpetual swap markets, where retail investors have heavily leveraged long positions amidst high funding rates. Tolson anticipates Bitcoin to continue its positive trajectory over the coming quarters but expects sharp corrections along the way.
Source (CNBC)
