Bitcoin falls below $64,000 and drags other cryptos into its fall

The queen of cryptocurrencies, which reached $73,000 last week, lost 12% in one week.

After reaching a peak above $73,000 last week, it’s a cold shower for bitcoin. The queen of cryptocurrencies has lost 12% in one week, including 7% in the last 24 hours. At 9:45 a.m. French time this Tuesday, March 19, bitcoin is trading below $64,000 according to data from CoinMarketCap.

Bitcoin is plunging the crypto market into the red, particularly weakening the 10 main capitalized cryptocurrencies. In one day, ether loses 9% and others altcoins (these cryptocurrencies other than bitcoin) show record declines, like cardano (-19%) or dogecoin (-24%).

How to explain this sudden fall? Although the decline in bitcoin is significant, “it is completely normal to see declines of this percentage. Historically, we have seen declines or pullbacks of up to 30% during bitcoin bull markets,” points out Simon Peters, market analyst at eToro.

“The question now is whether the price has fallen enough for investors to buy the dip, or whether the price action could prolong its decline,” he said.

Furthermore, investors have their sights set on the meeting of the monetary policy committee of the American Federal Reserve (Fed) which is being held this Tuesday, March 19 and Wednesday, March 20. Depending on the Fed’s announcements, the price of bitcoin could react in one direction or the other.

Foil ETF

The current volatility of bitcoin should not make us forget its surge since the start of the year. The queen of cryptocurrencies increased by more than 23% in one month, thanks in particular to investors’ euphoria with regard to new financial products, bitcoin spot ETFs.

As a reminder, on January 10, the American stock market watchdog (the SEC) authorized 11 spot bitcoin ETFs, offered in particular by asset managers like Blackrock and Fidelity. An ETF (or Exchange Traded Funds) is an index fund trading on a stock exchange which follows the evolution of a stock index (or one or more financial or physical assets, such as gold) by replicating the increase as well as the drop in the price of this index (or these assets).

Before January 10, the SEC only approved Bitcoin futures ETF (this was the case since 2021) but not spot (spot) bitcoin ETFs, considering that futures are more difficult to manipulate because the market is based on the futures prices of the Chicago Mercantile Exchange (CME), regulated by the Commodity Futures Trading Commission (CTFC).