On Monday, bitcoin plunged more than 6 percent in more than two hours, falling under the $7000 mark as the tax-filing deadline in April is drawing closer.
Based on the data from CoinDesk, the most famous digital currency fell to a low of $6,646.07 at 3:49 pm ET Monday. Over the past month, bitcoin prices have dropped over 27 percent.
According to some analysts, the main driver for this month’s sell off spree is tax-related selling.
Fundstrat Global Advisors head of research Thomas Lee stated in a report last week that United States households might owe capital gains which is valued at $25 billion taxes for their digital currency holdings. Investors are selling bitcoin to meet tax liabilities. This could mean a selling splurge into U.S. dollars before the tax filing deadline at April 17.
This year, bitcoin prices have dipped over 52 percent following its initial start of more than $14,000 based on CoinDesk data. Since the year started, the overall Cryptocurrency market shed more than its half market capitalization. According to data from CoinMarketCap.
Regulatory uncertainty is also considered as one of the key factors that is affecting pricing pressure.
In March, the number one Cryptocurrency began falling under $10,000, following the SEC announcement that online platforms which are exchanging digital assets that are seen as securities must register under the agency.
International regulators are undecided on how to monitor the Cryptocurrency due to its decentralized nature.
Last week, the Reserve Bank of India issued an announcement that regulated financial institutions are now legally prohibited in dealing with cryptocurrency.