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Bitcoin surged to a new all-time high on Tuesday, surpassing the $69,000 mark for the first time in over two years, before experiencing a rapid decline in value.
According to Coin Metrics, the price of bitcoin reached a peak of $69,210 on Tuesday morning before swiftly retracing its gains. By late afternoon trading, the cryptocurrency had fallen by 8% to $61,973.37.
Despite the recent bullish momentum, investors have expressed concerns about the possibility of a significant correction as profit margins approach unprecedented levels.
Ed Tolson, CEO and founder of the crypto hedge fund Kbit, warned of a potential steep correction ranging between 10% and 20%, particularly noting the vulnerability of leveraged long positions in the crypto perpetual swap markets.
Owen Lau, an analyst at Oppenheimer, echoed this sentiment, emphasizing caution amid the rapid ascent of bitcoin’s price. However, he highlighted the presence of long-term catalysts supporting positive price movements.
Bitcoin’s attainment of a new all-time high underscores its resilience and enduring relevance in the digital asset space, according to industry experts.
Alex Thorn, head of research at Galaxy Digital, emphasized bitcoin’s historical ability to recover from significant downturns, citing its enduring appeal over its 15-year existence.
Clara Medalie, research director at crypto data provider Kaiko, characterized the new record as a psychological milestone demonstrating the crypto market’s resilience in the face of adversity. However, she noted that the milestone itself may not substantially impact industry innovation.
The recent surge in bitcoin’s price has been fueled by several key themes, including the launch of U.S. spot bitcoin exchange-traded funds (ETFs) and anticipation surrounding the upcoming “halving” event, which is expected to further reduce bitcoin’s supply.
Despite Tuesday’s market correction, the achievement of a new record represents a significant milestone for the crypto industry, which has faced challenges related to reputation and regulation in the past.
John Todaro, an analyst at Needham, suggested that the new high could attract retail investors back to the crypto market, potentially leading to increased investment flows into alternative coins.
Overall, the rise of bitcoin and the broader crypto market reflects growing acceptance and legitimacy, particularly with the success of U.S. spot bitcoin ETFs, which have garnered significant investor interest and assets under management.