Bitcoin and all other major cryptocurrencies registered a sharp decline on Tuesday after soaring to record highs in the past few weeks. While Bitcoin dropped below the $60,000 mark, witnessing over 11 per cent drop in seven days, Ethereum declined 11.38 per cent to $4,176 from as high as $4,808 on November 12, data from CoinMarketCap showed. All other top altcoins as well including Binance Coin, Solana, Cardano, XRP, Polkadot, Dogecoin, and Shiba Inu have recorded a double-digit decline in the past seven days and 24 hours except USD Coin and Tether. Bitcoin was trading at $59,408, the lowest price since October 28, at the time of filing this report. The drop has come just seven days after Bitcoin hit an all-time high price of $68,622 on November 10.
“Bitcoin’s price analysis reveals that the traded volumes were continuously falling over the past month. However, with the heavy influx of money from a few large players, BTC kept going higher. When traded volumes are low, a few large players can move the market in their preferred direction. And when the bears take over, the retail players rush for cover bringing the market even lower. It was exactly what we observed over the past 24 hours,” Edul Patel, CEO & Co-founder of Mudrex told Financial Express Online.
According to analysts, the decline was due to the new tax-reporting requirements in the US for digital currencies that are part of the $550 billion infrastructure bill that was signed by President Joe Biden into law on Monday, as per a Bloomberg report. “We’ve seen the U.S. infrastructure bill get signed, which has initiated a selloff from traders who are concerned about regulation and taxation,” the report said quoting Hayden Hughes, chief executive officer of Alpha Impact, a social-trading platform.
“The total cryptocurrency market cap is currently around $2.6 trillion and Bitcoin’s market cap is $1.12 trillion, which makes its market dominance stand at approximately 43.5 per cent. The entire cryptocurrency market reacts and imitates the movement in BTC. Over the past month, the market moved linearly higher. With this correction in BTC, the entire market naturally reacted as investors rushed for cover,” added Patel.
On the other hand, the drop was likely due to China’s stance on crypto use and mining in the country. On Tuesday, Meng Wei, spokesperson for China’s National Development and Reform Commission in a press conference said that the commission will strengthen regulation over virtual currency mining, as per China Daily. The major focus would be on industrial and centralized mining, State-owned entities that mine virtual currency, and bitcoin mining. Mei added that imposing punitive electricity prices would be considered on those enjoying household electricity prices that involve virtual currency mining activities.