Crypto market sheds $400 billion of value as bitcoin sell-off intensifies after all-time high

Bitcoin slid further on Wednesday, briefly dipping below the $61,000 mark after, continuing a sell-off that began after the cryptocurrency hit an all-time high last week.

At around 03:38 a.m. ET, bitcoin had bounced back to trade just over $62,900, down around 2.5% from 24 hours prior, according to CoinDesk data.

Bitcoin has had a stellar run and is up 124% in the past year. The world’s biggest cryptocurrency hit a record high of just under $73,800 last week.

The cryptocurrency’s price has been supported by the launch of the spot bitcoin exchange-traded funds in the U.S. in January, as well as by the upcoming halving — an event written in bitcoin’s code, which effectively slows the supply of the digital coin onto the market. Historically, halving has supported prices.

The value of all digital coins in existence has plunged since bitcoin’s all-time high and was down $210 billion as of Wednesday morning, according to data from Coinmarketcap.

The entire cryptocurrency market has shed around $400 billion of value since the bitcoin all-time high, as other digital assets such as ether and Solana also fell sharply.

Part of the decline is likely profit taking following a sharp rally in cryptocurrencies.

Data from CryptoQuant shows a massive spike in short-term holders selling their bitcoin at a profit on March 12.

“We’ve seen 20-30% pullbacks in previous Bitcoin bull markets as a normal occurrence when things start heating up. And we definitely had many signs over the past week of things heating up quite a bit,” Vijay Ayyar, vice president of international markets and growth at crypto exchange CoinDCX, told CNBC.

Some momentum has come out of the bitcoin ETFs, which recorded a total of $154.4 million of net outflows on Monday, according to BitMEX Research. It was the first time the ETFs recorded net outflows since Mar. 1.

Grayscale Bitcoin Trust, or GBTC, logged $642.5 million of outflows, according to BitMEX Research, while the other ETFs posted modest or flat inflows.

GBTC has been criticized for its higher-than-average fees. However, Grayscale CEO Michael Sonnenshein told CNBC earlier this week that the crypto fund manager expects to bring fees on its Grayscale Bitcoin Trust ETF down in the coming months.

Ayyar said that, if bitcoin were to fall below the $60,000 threshold, the cryptocurrency could weaken further to test the $50,000 to $52,000 level, “which would be our line in the sand for this bull market to sustain going forward.”

– CNBC’s Tanaya Macheel and Ryan Browne contributed to this report.