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Bitcoin fell on Wednesday for the third day in a row as the cryptocurrency pulled back from its latest run in this year’s rally and investors looked ahead to the conclusion of the latest Federal Reserve meeting.
The price of the flagship cryptocurrency was last lower by 1.6% at $63,603.00, according to Coin Metrics. It fell as low as $60,793.60 in overnight trading. Wednesday was also the third consecutive day that bitcoin lost more than $1,000, a streak it hasn’t seen since June 2022.
Bitcoin has declined 12% in the past week, after hitting an all-time high of $73,797.68 last Thursday. It’s still up almost 50% for the year.
“The ETF-induced rally has – at least temporarily – come to a halt as net inflows start to slow,” Citi analyst Alex Saunders said in a note Wednesday. “Total inflows have netted $12 billion since inception, but the slowing pace has likely contributed to the weaker price action after bitcoin recently made new all-time highs.”
“Higher frequency crypto volatility has eased as financing rates on futures have started to normalize, signifying less demand for leveraged crypto exposure,” he added. “Still, open interest and volumes remain elevated.”
Other cryptocurrencies moved lower with bitcoin. Ether was down more than 1% to $3,297.11, after breaching $4,000 last week. XRP fell 3.5% and Shiba Inu coin lost 3%. The token tied to Solana, which has benefited from a recent rally in meme coins, slid more than 6%.
Crypto-linked stocks fared better, however. Coinbase rose 4%. MicroStrategy was flat, after tumbling about 20% earlier this week. In the mining sector, Iris Energy and CleanSpark gained 13% and 8%, respectively. Marathon Digital added 8.5% and Riot Platforms, which JPMorgan upgraded Wednesday to overweight from neutral, added 6%.
The recent weakness in bitcoin began as traders started taking profits after it had soared roughly 70% from the start of the year to its peak last Wednesday. Data from CryptoQuant shows a massive spike in short-term holders selling their bitcoin at a profit on March 12. That profit-taking led to a spike in long liquidations of leveraged bitcoin positions that continued through the start of this week, according to CoinGlass.
“We’ve seen 20-30% pullbacks in previous Bitcoin bull markets as a normal occurrence when things start heating up. And we definitely had many signs over the past week of things heating up quite a bit,” Vijay Ayyar, vice president of international markets and growth at crypto exchange CoinDCX, told CNBC.
Some momentum has come out of the bitcoin ETFs, which recorded a total of $154.4 million of net outflows on Monday, according to BitMEX Research. It was the first time the ETFs recorded net outflows since March 1.
Grayscale Bitcoin Trust (GBTC), logged $642.5 million of outflows, according to BitMEX Research, while the other ETFs posted modest or flat inflows.
GBTC has been criticized for its higher-than-average fees. However, Grayscale CEO Michael Sonnenshein told CNBC earlier this week that the crypto fund manager expects to bring fees on its Grayscale Bitcoin Trust ETF down in the coming months.
Ayyar said that, if bitcoin were to fall below the $60,000 threshold, the cryptocurrency could weaken further to test the $50,000 to $52,000 level, “which would be our line in the sand for this bull market to sustain going forward.”
—CNBC’s Ryan Browne contributed to this report.
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