Bitcoin fell below $100,000 for the first time since June. Why are investors selling cryptocurrency?
The value of bitcoin fell below $100,000 for the first time in more than four months. The cryptocurrency fell 6.5% to $99,963 during trading on November 4.
After hitting an all-time high a month ago, bitcoin has lost more than 20% of its value - such a drop is usually defined as a bearish trend, Bloomberg notes.
Why cryptocurrency sales are on the rise
Bitcoin is getting cheaper amid a decline in investors' appetite for risk, CNBC writes. Many investors perceive cryptocurrency and shares of AI-companies as part of one speculative trend, so the decline of one asset often pulls the others, the channel explains. Thus, the Nasdaq Composite index, where the largest AI companies are concentrated, lost 1% on Tuesday. Investors sold off, in particular, the securities of Palantir, despite strong quarterly reports, fearing that the company's valuation was too high.
Investors were alarmed by the risks of a U.S. government shutdown and signs of slowing economic growth, prompting a sell-off in the world's largest cryptocurrency, Yahoo Finance wrote.
Selling by so-called whales - large holders of cryptocurrency - has increased in recent weeks, Sean Farrell, head of digital assets at Fundstrat, told the publication. "Whales continue to put pressure on the price," Yahoo Finance quoted Farrell as saying. According to him, billions of dollars worth of bitcoins have been transferred from private wallets to exchanges in recent days - presumably for the purpose of selling.
Compass Point analyst Ed Engel, whose note is cited by Yahoo Finance, estimates that net sales by long-term holders have exceeded 1 million bitcoins since the end of June.
"While selling by long-term holders is common in a bull market, spot buyers from retail investors are less active now than in previous cycles," Engel noted, adding that inflows into bitcoin-ETFs have slowed in recent weeks. "While we see support for bitcoin above the $95,000 mark, we don't see any meaningful growth drivers in the near term," he added.
This article was AI-translated and verified by a human editor
