Over the last 24 hours, bitcoin’s price has dropped by approximately 9% as more than $1,000,000,000 of leveraged bitcoin long positions have been liquidated across various exchanges.
The pullback over the last 24 hours is a continuation of a move that started on April 14th, after Bitcoin hit an all time high of $64,800. From peak to trough, the market has retraced as far as -26.97% since the April 14th all time high, a common occurrence in a bitcoin bull market.
Various reasons have been put forward by market commentators as to the reason for the pullback, one of which was U.S. President Joe Biden’s proposal to increase the capital gains rate for individuals with high incomes.
Although this headline may have had an effect on the markets and helped to spur this deleveraging event, ultimately, attempting to pin market fluctuations and volatility on a particular event or development can be quite futile. Bitcoin is a volatile asset, and its volatility is the price one pays for its outlandish returns.
Although the recent drop in price may frighten new entrants, it once again highlights the need to remain focused on bitcoin’s long-term fundamentals, and dollar cost average into a position. The Bitcoin network remains the strongest and most robust monetary network in the world, and nothing has changed in that sense over the previous 9-day span.
Enjoy the sale while it lasts and stack your sats, or someone else will.