Bitcoin fever is starting to burst as concerns about a market bubble discourage investors from buying.
Prices for the largest cryptocurrency fell as much as 6.8% on Wednesday and traded below $ 35,000. Ever since the market shot through all-time highs in early January, volatility and skepticism have been leading to Bitcoin that the running period has been excessive.
Analysts have pointed to $ 40,000 as the key level that Bitcoin needs to surpass in order to extract fresh money from investors riding cryptocurrency momentum. They argue that recent gains could be fleet if the rally stalls and the traders looking for quick returns move their money elsewhere.
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“Many cryptocurrency traders are diversifying into other coins fearing that Bitcoin could see another fall if $ 41,500 is not reached sometime soon,” said Edward Moya, senior market analyst at Oanda Corp.
There are also fears from Wall Street pros that a 400% Bitcoin rally in the past year makes it too risky for them to jump in. At Bank of America Corp. monthly survey, fund managers called bitcoin the world’s most overcrowded trade – the first time it has held that title since 2017.
– With the help of Joanna Ossinger