Why has bitcoin dropped to a two month low?

Bitcoin has posted its biggest one-day drop in almost two months, amid warnings that novice investors could suffer heavy losses from speculating in crypto assets such as “meme coin” dogecoin. Bitcoin tumbled more than 11% on Sunday, dropping from about $62,000 (£45,000) to $55,000 – its lowest level since the end of March.

What to expect from bitcoin's latest pullback?

It’s far too early to draw any conclusions from bitcoin’s latest drop despite 30-40% pullbacks being common pit stops across bitcoin’s various bull runs. While this drop fell a bit more from high to low than the usual bull run pullback, bitcoin’s price has since recovered and is hovering around $39,000, about a 40% drop from the top.

Why did Bitcoin’s price slip more than 17% last week?

Bitcoin’s mining difficulty reached its all-time high on January 20, 2022, and BTC ’s price slipped more than 17% during the last week. Both of these factors have squeezed mining profits a great deal. (Chart left: Bitcoin difficulty. Chart right: BTC/USD 7-day chart)

Is bitcoin's drop a potential decoupling in the cryptocurrency market?

With the second largest cryptocurrency, Ethereum, also preparing to shift away from proof-of-work to proof-of-stake, this latest bitcoin drop could mark a potential decoupling in the cryptocurrency market. In just the past two months, bitcoin’s dominance in the crypto ecosystem has fallen from over 70% to 43%.