Bitcoin experienced a decline on Tuesday, dropping below $63,000, as exchange-traded funds focused on the cryptocurrency saw net outflows for the first time since March 1.
The leading cryptocurrency, BTCUSD, was recently trading around $65,337, marking a 2.8% decrease over the past 24 hours. Over the past seven days, Bitcoin has fallen by 7.8%, yet it remains up by over 50% year-to-date, as per CoinDesk data. Last week, Bitcoin reached a record high of $73,798.
"We are currently witnessing a correction that had been expected and overdue," remarked Joel Kruger, market strategist at forex and crypto broker LMAX Group. Despite this correction, Kruger believes Bitcoin's overall upward trend remains intact, though he suggests it could potentially dip below $60,000.
Bitcoin ETFs experienced net outflows on Monday for the first time in several weeks, totaling approximately $154.3 million, according to Fundstrat data.
Henry Robinson, co-founder and head of crypto at Decimal Digital Currency, noted that profit-taking behavior has emerged after Bitcoin's recent all-time high. "It's logical for those who entered the market at lower price points, such as $20,000, $30,000, and $50,000, to secure some profits," Robinson stated.
The significant leverage within the crypto market exacerbated Bitcoin's decline earlier in the week. Over $480 million worth of leveraged long positions were liquidated in the past 24 hours, as reported by Coinglass. Leveraged traders, who borrow funds to amplify their positions, faced liquidation as Bitcoin's price turned against them, further intensifying the downward pressure.
Market participants are closely monitoring the Federal Reserve's meeting concluding on Wednesday, anticipating potential short-term impacts on Bitcoin's price. Kruger highlighted that the central bank's decision and remarks from Fed Chair Jerome Powell could influence market sentiment, particularly if perceived as less dovish.