Bitcoin drops below $29k erasing most of its 2021 gains

Massive sell pressure saw the leading cryptocurrency tumble and lose over $6,500 earlier today

Bitcoin’s price has slumped to below $29k today for the first time since 5th January. The digital asset bled value heavily, setting a low of $28,800 on Binance owing to strong selling in the last two days. This drop takes the week’s slip to almost 20%.

However, the crypto coin has tried to stabilise since bottoming out. At the time of writing, bitcoins are changing hands for $31,176.60 on Binance. This current price represents a 9.81% dip in the last 24 hours.

Analysts claim the slump was triggered by extensive profit-taking by investors from Europe and the US. They argue that investors considered Bitcoin a crowded trade and opted to gain profits. Bitcoin’s trading activity on major exchanges backs this theory as there is an increased wave of selling pressure. The last time Bitcoin traded at this level, it was gearing up for an epic run that came to a halt after hitting a new all-time high in the region of $41,000.

Veteran crypto traders believe this is the first 30% correction in the 2020-2021 price rally. Looking back through Bitcoin’s history and previous market cycles, such massive corrections are not unusual. In the last 2017 bull run, the Bitcoin market recorded several 30% corrections on the way to unlocking a record high in December. Bitcoin bulls are confident and see the correction as a buying opportunity.

A Twitter user by the name Altcoin Sherpa explained his view on the dip, saying, “Personally, I would love for a big base to be formed and for price to go a bit lower. The bigger the pullback, the larger the base, and thus a higher % chance of $BTC going to 100k+ in later 2021 IMO (fingers crossed). This is a blip on the radar.”

The drop has impacted the entire crypto space as altcoins are suffering the same fate. A few altcoins like Bitcoin Cash, Cardano, and Stellar have been heavily affected, seeing double-digit dips. With Bitcoin having lost ground at the support levels of $32,000 and $30,000, industry experts have predicted it may retreat and find support at the $24,000 level.