The price of Bitcoin (BTC) has decreased significantly since Jan.8, dropping by more than $ 10,000 at time of publication. According to Anthony Trenchchev, CEO of Nexo, private investors may be one reason for the decline.

“The price correction we’re seeing was driven by retail investors who have followed the lead of institutions that are making the most of Bitcoin,” he told Cointelegraph on January 11th, adding:

“When BTC crossed $ 40,000, profits peaked, and they attracted small investors who are understandably likely to sell quickly. There have been many offers of sales in recent days – the drop in the bitcoin price as a result of the build-up of these offers.”
After its 24-hour high of around $ 20,000 in 2017, Bitcoin rapidly doubled, reaching nearly $ 42,000 per coin by Jan.8. And in the days that followed, the digital asset dropped nearly 28% to nearly $ 30,100.

Price hikes often accompany setbacks, although repayment does not necessarily mean the end of the overall beef market. So what is the signal of the bitcoin macro summit?

“There are some salient indicators to look out for. For example, regulation is having a strong influence on the market,” Trenchev told the Coitelegraph on January 8th. “Regulatory activities that appear to be tightening the rules for cryptocurrencies may discourage new buyers.”

US regulators have upped their crypto involvement in recent years, which could be a sign of an emerging industry. Several lawsuits have been highlighted recently, including a US government proposal that aims to track digital assets traded on exchanges.

“There is a possibility that the excessive tension will cause some kind of breakdown, although I doubt that this will be a big problem,” Trenchev said. “Every year since 2013 we have seen a ‘crash’ of roughly 25% from the peak reached earlier in the year, yet we hit BTC when we hadn’t seen spikes before.” he added. “Such corrections are an inevitable aspect of market behavior,” he said on January 8th, referring to the small correction that occurred that day.

“There is a lot of focus on institutional participation in bitcoin price movements, and rightly so – but retail activity needs to be closely monitored for signs that the market is peaking,” Trenchev said. “A lot of people would panic, make profits and leave, which could have a domino effect on the rest of the market.”

The second half of 2020 attracted significant bitcoin interest from big giants like MicroStrategy and MassMutual, making this rally different from previous years.

Source: CoinTelegraph

LEAVE A REPLY