Bitcoin dumped over weekend, but recovers

Zhu Shenshen
From a record high of US$63,000 last week, the cryptocurrency crashed to US$51,000. But the rebound to US$57,000 is seen as a sign of confidence.
Zhu Shenshen

Bitcoin's price rebounded on Monday after a 14 percent plunge over the weekend due to high leverage, profit-taking and strong expectations of new regulations — and some trading platforms even crashed under the volume.

After Bitcoin hit a record high of over US$63,000 last week, the cryptocurrency experienced a crash over the weekend to plunge to US$51,000 from US$59,000. Other cryptocurrencies including Ethereum and Dogecoin also fell dramatically.

The Bitcoin price gradually rebounded to US$57,000 by 4pm Chinese time on Monday. 

The market lacks positive expectations after the record high, which caused a “sharp correction” said Xu Tong, a senior analyst at Huobi, a major Bitcoin trading platform. 

The excessive accumulation of early profits on Bitcoin investment caused selling pressure. The Coinbase stock sales news also created panic .

Coinbase’s top executives sold shares immediately after the major cryptocurrency listed in the Nasdaq last week.

Turkey has banned trading of, and payment for, Bitcoin.

Another major reason for the big dump is high-leverage, which has been used in margin trading to pursue higher returns, according to KuCoin, an IDG-invested cryptocurrency trading platform.

“The market under high leverage is very fragile. Once the price drops, it will trigger more declines with panic among retail investors,” said KuCoin CEO Johnny Lyu. 

During the weekend's plunge, Chinese Bitcoin investors found it difficult to access trading platforms, which caused substantial losses.

But the the rebound shows investors still have long-term confidence in Bitcoin. 

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