Bitcoin quickly lost altitude early on Monday , falling over 15% to less than $ 50,000 before rebounding somewhat.The lower price came after bitcoin hit a new high above $ 58,300 over the weekend.

The decline seemed to accelerate when US Treasury Secretary Janet Yellen described bitcoin as a "highly speculative asset" that was extremely inefficient for transactions. Speaking at a New York Times event, Yellen called the amount of energy consumed in processing these transactions "staggering".

The # 1 cryptocurrency by market value rebounded to over $ 55,000 at 3:05 p.m. UTC, down about 6% in 24 hours, according to Data 20 .

The pullback could be extended further, as the recent rally seemed overloaded, according to David Lifchitz, CIO of the trading firm quantitative based in Paris ExoAlpha.

"A 15% correction could occur, evacuating the hot market a bit, before reaching new highs " Lifchitz told. "The more parabolic a move is upward and faster, the more fragile it is, so a pullback would be more than welcome.

Indeed, bitcoin has seen a dizzying rise in prices over the past four months, from $ 10,000 to almost $ 60,000, with only one bull market correction in the second half of January.

The recent increase $ 30,000 to $ 58,000 has been even sharper, so a healthy cooling of the market appears to be lagging behind - more so, as are several technical analysis tools, including the Relative Strength Index (RSI) widely followed. , report overused conditions with a reading greater than 70.

 Bitcoin then briefly say that the analysts

Bitcoin daily chart
Source: TradingView

"Technical indicators such as RSI and Stoch tips on many chart timeframes indicate that the crypto asset is overbought,which implies that we may soon see a retracement, ”Simon Peters, analyst at eToro, said in an email.

Peters also signaled a

The MACD Histogram, an indicator used to measure trend strength and trend changes, produced lower highs, contradicting the higher highs on the chart of price, confirming the

Macro Factors

The case for lower prices is rising US bond yields adjusted for inflation, as discussed last week.

The 30-year inflation-adjusted return, or real return, turned positive for the first time since June 2020, and the 10-year real return fell to -0.80% from to lows close to -1.05% observed last month, according to data provided by the US Treasury.

Continued rise in yields could push the US dollar higher, putting selling pressure on stocks and bitcoin. Stock markets are trading at press time, with S&P 500 futures dropping 0.6% on the day.

How far could bitcoin go?

"The pullback can easily extend to old resistance turned to support near $ 42,000 ", Joel Kruger, currency strategist at LMAX Digital, said . The markets are shaking gUsually weak bulls with a dip to old obstacle levels turned to support before expanding bull runs.

Bitcoin fell from its then high of $ 41,962 on January 8, establishing that level as crucial resistance and slipped to $ 30,000 on the days following. The new resistor was scaled up on February 8 after electric maker Tesla announced its purchase of 1 , $ 5 billion in bitcoins .

Crypto analysts expect other companies to emulate Tesla's move to 'buy bitcoin. However, according to Lifchitz, they might consider investing in price cuts.

"$ 50,000 looks like the first stop for a slight pullback , but a second step could bring it down to $ 40,000, while the $ 30,000 area basically looks likeultimate if things go wrong in the short term, ”Lifchitz said.

However, Patrick Heusser, head of trading at Switzerland-based Crypto Finance AG, said $ 52,000 is major support, adding that a significant correction could remain elusive, as the derivatives market is no longer exhibiting an excess of uptrend.

Also read: Bitcoin faces price turbulence as market liquidity drops, says JPMorgan

Bitcoin's average funding rate, or the cost of holding long positions in perpetual futures contracts listed on major exchanges, has fallen (normalized) below 0 , 08% early today, after peaking at multi-month highs overover 0.12% last week, according to Glassnode data.

While analysts are

"We believe the markets are showing a healthy correction " said Dibb. "BTC and ETH are trading still in an ascending channel, and momentum is still biased towards auctions.

EDIT (14:27 UTC, February 22, 2021): Updates prices in the second paragraph.