Bitcoin hit a new all-time high of $34,800 (£25,672) on Sunday but subsequently dropped to below $30,000 (£22,131) today. Speaking to Express.co.uk Paolo Ardoino chief technology officer of the cryptocurrency exchange Bitfinex said: “It is unsurprising to see some retracement after bitcoin catapulted to a series of all-time highs in what has been a stellar run for the king of crypto. Today we’ve seen some profit-taking.
“We are not making predictions, but this may be short-lived, based on the sentiment among traders on Bitfinex, we perceive that the overall bullish sentiment around bitcoin hasn’t changed.”
However, the Bitfinex chief technical officer added that bitcoin remains “at times a highly volatile asset”.
He claims that the price could be much more volatile but for the “increasing prevalence of high-frequency trading (HFT)” now operating on exchanges.
When there is a sharp price drop he suggested that there is an immediate “buying pressure in response” causing the price to become steady.
Speaking to Express.co.uk Simon Peters, an analyst at multi-asset investment platform eToro, said: “Bitcoin’s meteoric rise to $30,000 (£22,131) shows the huge amount of demand there is for the crypto asset.
“There continues to be a strong large scale investment in bitcoin from institutions.”
He described how “various investment banks have recently pivoted to a more positive view of bitcoin” adding that this could have contributed to the current rise.
Mr Peters added: “Retail investors have been buying up bitcoin and driving the price upwards again.
“I believe we are going to push back towards a new all-time high, but I wouldn’t completely rule out another price drop beforehand.
“If we do see a dump of bitcoin from larger investors, then we could see the price fall back to the $20,000-23,000 (£14754 – £16,970) range.”
The cryptocurrency soared by 305 percent in 2020.