Recurring crypto déjà vu - Bitcoin experiences another dive after setting a new record

On Friday, the largest cryptocurrency globally briefly surged past the $70,000 mark but promptly experienced a 5% decline, dropping below $67,000.

• Bitcoin encountered significant selling pressure on exchanges on Friday as it sought to achieve new all-time highs, causing the rally to be capped just beyond the $70,000 mark.
• The decrease observed mirrored the correction experienced on Tuesday when the price fell from $69,200, although this time it was not as drastic.
• Liquidations of leveraged derivatives trades amounted to $240 million throughout the day, a less substantial figure compared to the $1.2 billion wipeout experienced on Tuesday.

Bitcoin bulls are experiencing a sense of déjà vu this week as, for the second time, a surge to a new all-time high was short-lived. During U.S. trading hours, Bitcoin surpassed the Tuesday record, reaching $70,136, only to face rapid selling pressure. Within seconds, the price plummeted about 5%, dropping to as low as $66,500 within an hour. Currently, Bitcoin is trading at $66,950, showing a marginal decrease for the day. The broader CoinDesk 20 Index (CD20) saw modest gains.

The decline from the all-time highs on Friday resulted in the liquidation of $240 million worth of leveraged derivatives trading positions across digital assets, a significantly lower amount compared to Tuesday's nearly $1.2 billion. This decrease in liquidations is attributed to the market having less leverage, indicating a less frothy environment compared to earlier in the week.

Sell orders totaling nearly 1,000 BTC, valued at approximately $70 million, became a formidable barrier preventing further upward momentum once Bitcoin surpassed $70,000, leading to a swift decline in the price.

As of now, the reversal observed today is not as drastic as the market movement on Tuesday when Bitcoin, for the first time this week, reached a new record high. During that instance, the price experienced a substantial decline of up to 14%, ultimately reaching a low around the $59,000 mark.