Coinbase hangover? That’s why bitcoin may suffer the steepest slump in February

Bitcoin prices plunged into correction territory on Sunday morning, marking the strongest slide for digital assets in February, following what has been a remarkable stretch for the crypto industry.

At the last check, bitcoin prices BTCUSD,
-14.69%
Late Sunday mornings were at $ 55,773.11, down nearly 14% from a recent peak on CoinDesk of $ 64,829.14. The decline at the top of the crypt meets the widely accepted definition of an asset correction.

However, slides of 10% or more bitcoin are quite common because the born asset is seen as inherently volatile. The last time the cryptocurrencies decisively reduced the comments of the Secretary of the Treasury, Janet Yellen, at a NewBook ​​Times DealBook conference, they were blamed for the crisis.

This time, market participants continue to be haunted by the specter of a treasury crisis, but it also lists a few other possible causes for Bitcoin correction.

Read: Long-term crypto: what is the perspective?

Crypt euphoria

Some industry participants point to an increase in speculative assets, such as dogecoin, as indications that the digital asset market is becoming turbulent and vulnerable to a downturn. Dogecoin prices registered an increase of over 7.252% compared to the last year.

Galaxy Digital GLXY,
+ 7.59%
CEO Michael Novogratz says that although he sees bitcoin reaching $ 100,000 by the end of 2021 and $ 500,000 by 2024, he believes the market will be marked by turbulence that he sees highlighted by the frantic appetite for assets such as dogecoin DOGEUSD,
+ 8.89%,
which was originally created as a parody of bitcoin and is seen by some as having limited utility.

See: Who’s laughing now? Dogecoin’s epic growth creating millionaires overnight

Novogratz said that the list of the cryptographic platform Coinbase Global COIN,
+ 5.96%
the listing fueled “a lot of anger” around the dogecoin and added that “this never ends well”, speaking at the virtual event hosted by MarketWatch and Barron’s on Wednesday.

Crackdown? Or “FUD”

Others have indicated the spread of fear, uncertainty and doubt or FUD, as described by the crypto community.

Bloomberg News reported that further speculation about a cryptocurrency crackdown by the U.S. Treasury Department on the use of digital assets for money laundering, without specific details, also had an influence on prices.

Coinbase hangover?

Some market participants have suggested that the long-awaited Coinbase listing on Nasdaq Inc. NDAQ,
+ 0.07%
it would prove to be a new top for the crypto market and would put prices under pressure after a rally in recent days and a new record for bitcoin at the beginning of last week.

Check it out: Coinbase IPO: Everything you need to know about the “moment of the pool” in the crypto

Yves Lamoureux, president of Montreal-based macroeconomic research firm Lamoureux & Co., told MarketWatch that he feared the euphoria surrounding bitcoin and crypto and saw them due to a cut. “Can you find someone with a bearish point of view?” he asked. “Not a resounding no,” he replied.

Read: Coinbase IPO is a huge score for the list of private equity investors in the cryptographic platform “Who’s Who”

In any case, bitcoin prices remain high due to the growing attention from traditional investors. Several Wall Street players, including Stanley Druckenmiller and Paul Tudor Jones, have embraced bitcoin. Renowned investor Bill Miller, founder of Miller Value Partners, in a letter to customers on the company’s website, who reaffirmed his founding perspectives on bitcoin.

Bitcoin prices have risen by about 90% so far this year. By comparison, GC00 gold prices,
-0.16%,
considered a rival to bitcoin, they have fallen by more than 6% so far in 2021, and more traditional securities recorded relatively more pedestrian returns. Dow Jones Industrial Average DJIA,
+ 0.48%
and S&P 500 SPX,
+ 0.36%
have risen by more than 11% so far, while the Nasdaq COMP Composite Index,
+ 0.10%
increased by 9%.

.Source