Ki Young Ju, the CEO and founder of analytics platform CryptoQuant, has offered his explanation on why Bitcoin has plunged below the $50,000 price mark. Contrary to popular views, the pullback is not the result of the new U.S. taxation proposal, as per Ju’s analysis.
Ki Young Ju Explains Bitcoin’s Latest Price Pullback
Ki Young Ju has taken to social media to address Bitcoin’s latest price pullback below $50,000.
Despite the current situation, the fundamentals of the leading cryptocurrency are still strong, according to him.
Ki Young Ju believes that the price pullback is the result of strong price correction and the result of over-leveraged long positions on crypto exchanges. Once the market cools off, which may take a few weeks, Bitcoin will likely resume its climb.
Over the past 24 hours, Bitcoin’s price has dropped by approximately 9% as more than $1,000,000,000 of leveraged Bitcoin long positions have been liquidated across various exchanges.
On April 22, the world’s leading cryptocurrency by market cap plunged by 7%, going below $50,000 to hit the $48,176 level. Meanwhile, Bitcoin (BTC) dominance has also dropped below the 50% mark for the first time since 2018.
The pullback is a result of a movement that started on April 14th, after Bitcoin hit an all-time high of $64,800. From its peak to its current position the market has retraced as far as -26.97% since last all-time high.
At the time of writing, the flagship cryptocurrency’s price valuation currently stands at $50,412.
Joe Biden’s Plans on Raising Capital Tax Gains
Various reasons have been put forwarded by the analyst for the pullback, one of which was U.S. President Joe Biden’s proposal to increase the capital gains rate for individuals with high incomes.
In April, the Biden administration unveiled a draft proposal on raising the tax on capital gains to 39.6% for those earning more than $1 million a year. Should the deal go through, this would result in making the tax go up by almost two times for those earning more than $1 million per year.
Ahead of Biden’s plan on the tax hike, Bitcoin’s sudden sell-off has wiped $300 billion from the combined cryptocurrency market value last weekend.