Bitcoin, the world's biggest and best-known cryptocurrency, fell more than 7 percent retreating from near-record highs and seemed to be establishing a new range in the low $60,000s. The blockchain network’s much-anticipated Taproot upgrade did little to provide a bullish trigger, despite the hopes of some major analysts.
Data indicates that Bitcoin (BTC) fell $60,350 at its lowest for the day, during late morning trade Singapore time and recovered some of those losses and currently at around $60,838 down 7.5 percent from the past 24 hours. Ether, the second-biggest cryptocurrency by market cap, was down 4.5 percent at $4,355.4.
Despite the price drop, the flagship cryptocurrency’s value has more than doubled since June, driven by mainstream adoption of cryptocurrencies and, more recently, the launch of futures-based bitcoin exchange-traded funds in the United States.
On Sunday, Bitcoin went through one of the major upgrades in four years called Taproot that enables its blockchain network to execute more complex transactions, potentially widening the virtual currency's use cases and making it more competitive with Ethereum for processing smart contracts. However, the much-anticipated upgrade did little to push the digital asset into a bullish rally.
According to a CoinShares recent report, the total flows into cryptocurrency funds declined from the fourth straight week, slipping from $174 million last week. The amount is still well off the $1.5 billion of inflows seen a few weeks ago when new exchange-traded funds backed by bitcoin futures contracts debuted in the US.
While Bitcoin gained $98 million, up from $95 million the week before and pushing its assets under management (AUM) to a record $56 billion. In the meantime, bitcoin’s dominance against altcoins has waned over the week.
Data from on-chain analytics firm Glassnode shows that long-term investors have stopped net accumulating Bitcoin (BTC) and are now diversifying into altcoins. Analyst Willian Clemente says that the recent net selling from that class of investors was the first in 6 months, signaling a “sell into strength” move.