Bitcoin tumbled 7% on Monday as the rally in the benchmark crypto asset cooled off, after roaring past the $60,000 milestone for the first time over the weekend.
After hovering around $56,000 for much of the week prior, bitcoin
surged 9% on Saturday, March 13 to clear $60,000 and set a record high of $61,519, according to data from CoinDesk.
More on the latest bitcoin momentum: Bitcoin price hits new record, clears $60,000 milestone
But the rally subsided early on Monday, with bitcoin dropping back to the levels of the week of March 8.
There was a similar movement in other major cryptocurrencies, which often move in tandem with bitcoin. The price of ether
tokens, which underpin the ethereum network, rose 11% on Saturday to more than $1,900, before falling 8% by Monday morning. Meanwhile the price of litecoin
rose 14% from early March 12 to March 13, before coming down more than 10% by Monday morning.
Michael Hewson, an analyst at CMC markets, noted that retail traders could be a key force behind the latest surge in bitcoin. While institutional investors played a crucial role in propelling bitcoin more than 750% higher from the beginning of 2020 to its peak on Saturday, retail investors’ wide enthusiasm for the cryptocurrency has also formed a crucial part of the bitcoin trend.
“It is possible the latest round of stimulus in the US, which includes $1,400 checks, helped drive up the asset,” Hewson said on Monday. “Bitcoin has cooled a little and is back below $56,000.”
With the $60,000 hurdle cleared, many bitcoin bulls are looking toward $100,000 as a key milestone on the horizon. The cryptocurrency’s rise in price is happening at speed, with bitcoin taking less than a month to add $10,000 in value, after passing $50,000 on February 16.
Sergey Nazarov, co-founder of the blockchain initiative Chainlink, said in a note on Saturday that even a $100,000 price for bitcoin may lowballing the momentum in the cryptocurrency.
“If you consider how many asset managers and retail investors are afraid of the existing financial system failing them, and if a small portion of them go on to place even a 5% of their portfolio into bitcoin, then $100,000 per bitcoin is a very conservative estimate,” Nazarov said.