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Bitcoin pares losses, hovers around $65k after record-high run

Published 03/06/2024, 12:56 AM
© Reuters

Investing.com-- Bitcoin pared a bulk of its losses in Asian trade on Wednesday, remaining within sight of a record high as steady capital flows into U.S. spot exchange-traded funds and anticipation of a “halving” event kept buyers in play.

The world’s largest cryptocurrency was trading down 1.9% at $66,022.9 by 00:41 ET (05:41 GMT), after hitting a record high of $69,063 on Tuesday, according to Investing.com data. 

The token had fallen almost immediately after hitting a peak, sinking as low as $59,000 before paring its losses. 

Gains in Bitcoin come amid consistent capital flows into the recently-approved spot ETFs in U.S. markets. Data released earlier this week showed U.S. crypto products seeing a fifth straight week of inflows, with Bitcoin products commanding the lion’s shares of inflows.

The spot ETF approval appeared to have drawn a deluge of institutional investors into crypto. 

Bitcoin was also buoyed by anticipation of a “halving” event in April, which will see the rate of generation of new Bitcoin being slashed in half, limiting fresh supply. 

Bitcoin’s highs mark a new record after November 2021. But in the interim, it had fallen drastically as the crypto industry was rattled by a string of high-profile frauds and bankruptcies. 

Still, the token has now risen more than four-fold from a low of about $15,000 hit in November 2022, in the aftermath of the FTX debacle. Bitcoin also surged about 150% through 2023. 

“The move has just gone parabolic, it just can’t continue like it has for so long, and we’re starting to see signs of a little bit of maturity in the move we’ve seen to date, but that doesn’t mean that it’s a reversal,” Tony Sycamore, market analyst at IG said in an interview with Ausbiz.

“At this point of time, if we get the weekly candle closing where it is now, which is around $63-$64,000, I think that does signify that it’s come a long way now.” 

Still, trading volumes in Bitcoin remain well below highs seen during 2021 and 2022, in the aftermath of the bull run. Relatively low volumes have also been attributed for the token’s massive run-up over the past year.

The token is still seen as far too volatile by a bulk of investors, with the retail sector having largely moved out of Bitcoin over the past year.

The spot Bitcoin ETF approval this year, however, was a positive move for the broader crypto industry, which was otherwise grappling with a massive loss of faith.

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