Bitcoin suffered its worst plunge since March in the previous three sessions, falling 5.18 percent over the weekend and extending its correction by an additional 7.29 percent to $35,388.
The leading cryptocurrency’s bearish correction can be attributed to profit-taking, led by concerns ranging from its overbought status, the recovery in the U.S. dollar index and rising yields on the 10-year Treasury benchmark note.
Traders appeared to have reallocated some of their profits into the cash and bond markets, primarily as the Federal Reserve hinted of reducing the size of its bond-buying program by January 2022.
However, the latest Bitcoin price correction hasn’t deterred traders and investors from focusing on the cryptocurrency’s long-term outlook.
A broader recovery could come after President-elect Joe Biden takes office, as his focus will be on distributing additional stimulus payments.
The prospects of a ballooning fiscal deficit would pressure the U.S. dollar lower, and thus, help Bitcoin rally back to $40,000. Traders and investors have positioned BTC to behave as a safe-haven against the greenback’s potential decline.
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