The cryptocurrency market has shown its ups and downs again, especially with Bitcoin, which recently jumped to a record high of $108,200. This rise created a lot of excitement for traders and investors.
But the excitement didn’t last long as Bitcoin’s price quickly fell to $95,000, leading to the liquidation of $540 million in long positions. It’s important to know what causes this big change.
Bitcoin reached $108,200 due to a few important factors. More institutions started adopting Bitcoin, with many well-known organizations announcing their purchases, which helped make it a more legitimate asset.
Regulatory clarity came from positive rulings and updates in major economies, giving investors confidence in Bitcoin’s legal status and drawing in more buyers. Bitcoin is limited to 21 million coins, and a recent halving event cut miner rewards, which helped drive up the price.
The drop to $95,000 happened because people took profits and a few other factors made it worse. The crypto market saw many people taking on large loans during the rally, and when prices started to drop, the forced sales of these loans made the decline worse. Traders changed their outlook, thinking the rally was too high to last, which caused more selling.
Additionally, worries about the economy, like increasing interest rates and less money available in regular markets, led investors to protect themselves from possible risks, which affected Bitcoin’s price. Finally, when big holders of Bitcoin, called “whales,” move large amounts to exchanges, it can cause panic for smaller traders.
