Bitcoin fell to $60,350 at its lowest for the day, taking losses from a record high of $69,000 struck on Nov. 10 to more than 11%.
Ether, the second-biggest cryptocurrency by market value, was down 4.5% at $4,355.4.
Cryptocurrency analysts said there did not seem to be any news driving the declines, and the moves seemed driven by profit taking after the sharp run-up.
“There is a lack of news and this is some pure selling of spot and some additions of short selling. Outside of this, there is no significant news,” said Matthew Dibb, chief operating officer at Singapore-based crypto asset manager Stack Funds.
Bitcoin’s value has more than doubled since June, driven by mainstream adoption of cryptocurrencies and, more recently, the launch of futures-based bitcoin exchange-traded funds in the United States.
Explained: What does Bitcoin’s Taproot upgrade mean for investors
Bitcoin goes through major upgrade!
Bitcoin went through a major upgrade on Sunday that enables its blockchain to execute more complex transactions, potentially widening the virtual currency’s use cases and making it a little more competitive with Ethereum for processing smart contracts.
Smart contracts are self-executing transactions whose results depend on pre-programmed inputs.
The enhancement, called Taproot, is the most significant change to the bitcoin protocol since the SegWit (Segregated Witness) block capacity change in 2017. SegWit effectively increased the amount of transactions that could fit into a block by pulling data on signatures from bitcoin transactions.
Noelle Acheson, head of market insights at Genesis, a digital currency prime broker, said bitcoin’s potential applications have become broader with Taproot.
“More flexible transaction types and lower costs are likely to support more development of DeFi (decentralized finance) and NFTs (non-fungible tokens) on bitcoin, and could set the stage for a wave of technological progress on the original crypto network,” she added.
The run-up to Taproot’s activation has spurred, in part, a rally in bitcoin, pushing it to an all-time high of $69,000 on November 10. Over the last two months, bitcoin has surged about 47%.
It went through a major upgrade, called Taproot, on Sunday that enables its blockchain to execute more complex transactions, potentially widening the virtual currency’s use cases and making it a little more competitive with ethereum for processing smart contracts. Smart contracts are self-executing transactions whose results depend on pre-programmed inputs.