Bitcoin price: Crypto drops 10% over Evergrande fears days before Taproot update rolled out

The crypto has lost 10 per cent of its total value just days after hitting new records, and analysts can’t agree on the cause.

Experts have been left slightly baffled after Bitcoin’s value dropped by 10 per cent in just two days.

That’s despite the cryptocurrency reaching a new all-time high earlier this week and rolling out a major update over the weekend.

On Thursday Australian time, the top-performing blockchain hit a new high close to the US$70,000 mark.

However now, 48 hours later, the coin has dropped by 10 per cent of its original price, according to CoinDesk, to reach a low of $US62,321.50.

At time of writing, that number was slightly higher, at $US63,618.27.

Crypto pros attributed the drop to a number of different things, with some blaming China and others dismissing it as the inevitable consequence of breaking a new price record.

Jake Wujastyk, chief market analyst at TrendSpider, was of the opinion that Chinese property developer giant Evergrande was dragging the economy down and Bitcoin with it.

“Bitcoin had a slight pullback (for Bitcoin standards) after hitting new all-time highs on Wednesday,” he told Forbes.

“This move was strongly correlated with the markets moving down on Wednesday as the broad markets were spooked about the news regarding Evergrande,” he stated.

However, another market analyst, Jean-Marc Bonnefous, head of asset management at Tellurian ExoAlpha, disregarded “the Evergrande contagion” as the reason behind the plunge.

Instead, Mr Bonnefous believed it was inevitable for the coin to plummet after a huge rally, telling CoinTelegraph: “The recent dip is probably more of a technical consolidation after the sharp rally of the last few days.”

Meanwhile, others were surprised by the drop, expecting the digital currency to be on the rise with its new Taproot update coming into effect over the weekend.

“Bulls may have some power left to push the market higher as a result of the [Taproot] upgrade,” Lukas Enzersdorfer-Konrad, chief product officer at Bitpanda, said to CoinDesk.

Others disagreed, saying the update would have no bearing on the crypto’s value.

“The Taproot upgrade will have minimal impact on Bitcoin’s price,” Edward Moya, senior market analyst for the online foreign-exchange broker Oanda, also told CoinDesk in an earlier article.

Bitcoin has recently ridden a wave of a enthusiasm, taking it to new records over the past month after major gains.

It was listed on the New York Stock exchange through a futures exchange traded fund (ETF) in late October.

Earlier this week, the US government released its monthly report into the state of inflation and found it had surged to a 31-year high.

Bitcoin rode the wave amid inflationary fears, with investors piling in, as the blockchain is largely immune to inflation.

Bitcoin has a market capitalisation of US$1.2 trillion.

The blockchain went from the fringes to the mainstream earlier this year, with its price rising 346 per cent in the last 12 months.

On Tuesday, the world cryptocurrency market became worth more than US$3 trillion for the first time ever.

Read related topics:Cryptocurrency

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