Bitcoin on Tuesday fell as low as under $63,000, as exchange-traded funds investing in the cryptocurrency on Monday saw their first day of net outflows since March 1.
The No.1 crypto (BTCUSD) was last trading at around $65,337, down 2.8% over the past 24 hours. Bitcoin is now down 7.8% over the past seven days, but is still up over 50% this year to date, according to CoinDesk data. The crypto hit a record high at $73,798 last week.
"We are officially in the throes of a correction that had long been anticipated and was well overdue," Joel Kruger, market strategist at forex and crypto broker LMAX Group, wrote in emailed comments. While bitcoin's overall uptrend remains intact, it could easily dip back down below $60,000, according to Kruger.
Bitcoin ETFs on Monday saw net outflows for the first time since March 1, with total outflows of about $154.3 million, according to data from Fundstrat.
Bitcoin is seeing some profit taking after hitting an all-time high last week, according to Henry Robinson, co-founder and head of crypto at Decimal Digital Currency.
"It makes sense for someone who bought bitcoin at $20,000, $30,000 and $50,000 to go and take some chips off the table," Robinson said in a call.
The large amount of leverage in the crypto market also helped worsen bitcoin's decline earlier on Tuesday, according to Robinson. Bitcoin saw over $480 million leveraged long positions liquidated over the paest 24 hours, according to data from Coinglass. For traders who borrowed money to make a bigger bet on an asset price's uptrend movement, if the price goes against them, their positions get liquidated and they are forced to sell - adding pressure to a downward movement.
Investors are watching the Federal Reserve meeting that concludes on Wednesday, which could impact bitcoin's short-term price action - especially if the central bank's decision and Fed Chair Jerome Powell's comments are perceived to be less dovish, according to Kruger.
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