Bitcoin And Memecoin Rebound After Sharp Drop

JAKARTA - The crypto market experienced great turmoil on March 5, when Bitcoin (BTC) had touched an all-time high of 69,000 US dollars (Rp 1.08 billion) before falling to 59,000 US dollars (Rp 925 million) in a short time. This more than 10% drop dragged many other crypto assets into the red zone.

Bitcoin, which is the largest crypto asset, affects market sentiment as a whole. Memecoin is among the hardest hit. Dogecoin (DOGE), for example, slumped to 30%, while Shiba Inu (SHIB) plunged more than 40% in Binance before recovering some of its losses.

This sharp decline also had a negative impact on traders who used leverage, namely loans to increase their purchasing power. According to Coinclass data, market liquidation reached USD 1 billion (IDR 15.7 trillion) in 24 hours, with USD 800 million (IDR 12.6 trillion) of which came from Bitcoin's long position, which means traders are optimistic of experiencing heavy losses.

The Cause of the drop in BTC

Some analysts attribute Bitcoin's decline to profit-taking after prices hit new records, as well as sales by miners. CryptoQuant data shows that miners' outflows, namely the number of Bitcoins transferred by miners to the exchange, increased to 39,000 BTC and 36,000 BTC on March 1 and 5, respectively. This indicates that miners sell their stock in the market - a bearish signal.

However, the market did not long ago manage to bounce back on March 6. Bitcoin rose again to USD 67,000 (IDR 1.05 billion) during the Asian trading session. Ethereum (ETH), the second-largest cryptocurrency, also strengthened 7% and reached USD 3,800 (IDR 59.6 million).

In the memecoin sector, Dogwifhat (WIF) leads the daily rise by surging 35% and trading above $2 (Rp 31,390) after successfully registering on Binance. PEPE follows with a 25% increase as this article is written. Meanwhile, SHIB and DOGE rose 5% and 10% respectively on daily graphs.

Bitcoin Prospect

Some market observers are optimistic that the price of Bitcoin will continue to rise, given the tight supply conditions and the upcoming half-halving event in April. Halving is a process of reducing the number of new Bitcoins created every 10 minutes in exchange for miners.

Addex Adelman, CEO of Lolli (Bitcoin award applicability), had the same view in a recent comment on CoinDesk1's report. He confirmed that the daily average demand for Bitcoin-based exchange-traded funds (ETF) of 500 million US dollars (Rp 7.8 trillion) exceeded Bitcoin production by miners. In addition, after halving, the decline in Bitcoin supply in April will increase the scarcity and price to 150,000 US dollars (Rp 2.35 billion) next year.