Bitcoin rises to record above $69,000, then quickly tumbles 8%

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Bitcoin tumbled on Tuesday shortly after it reached a new all-time high for the first time in more than two years.

The price of the cryptocurrency topped $69,210 on Tuesday morning, according to Coin Metrics, and then quickly pulled back. The losses deepened in late afternoon trading. It was last trading lower by 8% at $61,973.37.

However, with bitcoin on a hot streak, up 45% this year already, investors have cautioned that things could soon cool as unrealized profit margins approach extreme levels.

"The market is positioned for a steep correction, possibly between 10% and 20%," said Ed Tolson, CEO and founder of the crypto hedge fund Kbit. "Any material move down will result in cascading liquidations on the crypto perpetual swap markets, where retail has piled into levered long positions, where funding rates are very high. Over the next few quarters, we expect bitcoin to perform well, but with sharp corrections along the way."

Oppenheimer's Owen Lau agreed.

"The rise is so much so fast that we are cautious about a correction," he said. "But longer term, there are still catalysts supporting the positive price action."

Bitcoin notched its previous record of $68,982.20 on Nov. 10, 2021, about a year before the catastrophic failure of FTX plagued the crypto industry in what some call crypto's Lehman Brothers moment.

"Bitcoin reclaiming its all-time high yet again shows it is never going away," said Alex Thorn, head of research at Galaxy Digital. "In its 15 years of existence, bitcoin has seen four 75% [plus] drawdowns, and each time it has come roaring back."

Clara Medalie, research director at crypto data provider Kaiko, echoed that sentiment, saying a new record is "an important psychological