The price of Bitcoin (BTC) has dropped significantly since Jan. 8, down more than $ 10,000 in total at the time of publication. According to Antoni Trenchev, CEO of Nexo, private investors could be part of the rationale behind the decline.

“The price correction we are seeing was triggered by private investors following the lead of institutions creating the Bitcoin high,” he told Cointelegraph on Jan. 11, adding:

“When BTC passed $ 40K, profits were at a level that spurred smaller investors who are, understandably, more likely to sell quickly. There has been a wave of sell-off trades in recent days – BTC’s price drop is a result of an accumulation of these trades. “

After blazing past its 2017 record high close to $ 20,000, Bitcoin quickly doubled to reach nearly $ 42,000 per coin on January 8. In the days after fell about 28%, to nearly $ 30,100.

Price hikes are often accompanied by downturns, although a retracement does not necessarily signal the end of an overall macro bull market. So what would a macro Bitcoin summit signal?

“There are a few observable signs to watch out for,” Trenchev told Coitelegraph on Jan. 8. “For example, regulation has a strong impact on the market,” he noted. “Regulatory activity that appears to tighten crypto rules may deter new buyers.”

Regulators in the United States have their commitment in the crypto space of recent years – possibly the sign of a maturing industry. Several legal actions have recently come into the spotlight, including a US government proposal targeting track digital assets withdrawn from exchanges.

“There is even a chance of over-excitement to cause a crash, although I doubt it would be too much of a concern,” Trenchev said. “Every year since 2013, there has been a ‘crash’ of about 25% from a peak earlier in the same year, and yet here with BTC we are reaching those heights it has never had before,” he added. “Corrections like this are an inevitable aspect of market behavior,” he said on Jan. 8, referring to a smaller correction that took place on that day.

“So much is being made of institutional involvement when it comes to bitcoin’s price movements, and with good reason – but the retail activity is something to keep a close eye on for signs that the market has hit,” Trenchev explained. “Many will panic, take their profits and walk away – which could have a knock-on effect on the rest of the market.”

The second half of 2020 was a remarkable number Bitcoin attention from mainstream giants, such as MicroStrategy and MassMutual, which may make this bull run differently from years before.