The most popular cryptocurrency bitcoin on Tuesday finally reclaimed its $50,000 level. The cryptocurrency with a market cap of $1 trillion had plummeted 25% down the last week after hitting its record high of $58,640 on February 21.
After bitcoin hit its record high, the rally corrected itself and the value came down as low as $43,343 last week. Given the highs and lows of bitcoin, the staggering dip that was seen the last week may just end up being a small blip in the bigger picture.
According to cryptanalysts, one of the reasons bitcoin was able to reclaim its value of over $50k is that very few HODlers are selling their coins during the falling of bitcoin’s price. HODL is a crypto-acronym that stands for ‘Hold on for Dear Life’. This just implies that there are more and more people who are holding on to their bitcoins despite the correction that leads to a dip in value.
According to CoinGecko, Bitcoin swung in a wide range of $47,000-$50,200 in the past 24 hours and is trading at $49,043.41, up 2.4% at the time of writing.
Earlier last week, bitcoin saw a sharp surge in its value for the first few days which was the result of the crypto hype cycle fueled by investor FOMO (fear of missing out). But by the end of the week, price correction on a significant level made bitcoin plummet as down as 25%. The last week’s plummet was the highest price move since March 2020. Another reason for the drop could be short-term cryptocurrency traders making profits.
It should be noted that in January, Bitcoin saw another sharp fall of 28% and then later reached $30,000. If the current trajectory follows the same suit, it will lead Bitcoin back to its February high.
Meanwhile, one of the biggest American banks, Goldman Sachs recently announced that it will be restarting its trading desk for cryptocurrencies due to the surge in the value of Bitcoin and Ethereum, and other cryptocurrencies. Trading of cryptocurrencies was banned at Goldman Sachs but since their credibility has expanded, it seems that cryptocurrencies may be making a grand return. Even American financial services corporation Mastercard also announced that it will allow its cardholders to make cryptocurrency transactions on its network.