Bitcoin (BTC) Price Fell 20% Off the Highs Over the Weekend as Markets Got 'Too Excited' About Coinbase (COIN), Says Mike Novogratz

April 19, 2021 6:20 AM EDT

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Bitcoin (BTC) price has corrected sharply over the weekend after hitting fresh record highs following the Coinbase (NASDAQ: COIN) direct listing that took place on Wednesday.

Bitcoin price first lost about 2.3% on Saturday before sinking to the low $50,000s in a volatile trading session on Sunday, when volume hit the highest level since February, according to Coinbase data.

Initial reports hinted that BTC corrected on unverified concerns that the U.S. Treasury Department may initiate the crackdown on financial institutions for money laundering using cryptocurrency. A tweet hinting this went viral over the weekend, however, no official confirmation followed.

A more likely cause of a drop is a market correction after Bitcoin went to print the record high on Wednesday following a market debut from Coinbase.

“With hindsight it was inevitable. Markets got too excited around $Coin direct listing. Basis blowing out, coins like $BSV, $XRP and $DOGE pumping. All were signs that the market got too one way,” Galaxy Digital founder Michael Novogratz said in a tweet.

Other cryptocurrencies, namely Dogecoin (DOGE) which is promoted by Elon Musk, fell as much as 50% on Saturday before recovering.

“The crypto world is waking up with a bit of a sore head today. Dogecoin’s 100% Friday rally was ‘peak party,’ after the Bitcoin record and Coinbase listing earlier in the week. Euphoria was in the air. And usually in the crypto world, there’s a price to pay when that happens.”

Bitcoin price hit $51,300 yesterday, which translates into a correction of over 20% from the fresh highs. This marked the lowest level for BTC in almost 4 weeks.

In the meantime, the buyers have managed to correct a portion of losses to allow the world’s largest cryptocurrency to trade around the $56,500 mark currently.

A correction in BTC price took place despite very positive comments on the future of Bitcoin, made by Li Bo, the deputy governor of the People’s Bank of China (PBOC).

Bo, who was talking at the “Boao Forum for Asia,” surprised crypto investors as his comments mark a positive U-turn on previous remarks made by China’s officials.

“We regard Bitcoin and stablecoin as crypto assets ... These are investment alternatives. They are not currency per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.”

It is believed that exactly his comments made Bitcoin jump higher from the weekend lows.

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