(Bloomberg) -- Bitcoin briefly dropped below $60,000 for the first time in more than a month, with volatility increasing ahead of a software update in the blockchain that has long been touted as bullish for the cryptocurrency.

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The original digital asset fell as much as 5% to $59,888, before paring the decline. Bitcoin has dropped by about 18% since reached a record $73,797 on March 14. Other smaller tokens such as Ether, Solana and Dogecoin slumped on Wednesday. Crypto—related stocks, including MicroStrategy, Coinbase and Marathon Digital, also traded lower.

The drop comes in the lead-up of a highly anticipated code update in Bitcoin taking place as soon as Friday. The quadrennial event, called the halving, has been considered as a positive catalyst for Bitcoin prices since it reduces supply of new tokens from the blockchain. But concern over whether the halving is already priced in against the backdrop of a risk-off investment environment have prompted an extended rout.

“People are looking to derisk as it remains to be seen if the halving will be a market moving event or a non-event overshadowed by the ETF,” said Nathanaël Cohen, co-Founder at INDIGO Fund. “There is an additional macro factor putting more pressure on risk assets (the Middle East tensions).”

The decline in Bitcoin over the last week was accelerated by a wave of liquidations in long positions for digital assets. About $780 million worth of bullish crypto wagers were liquidated within 24 hours last Friday. The cryptocurrency saw further decline as some investors turned risk adverse amid Iran’s attacks against Israel.

With the leverage in crypto flushed out in the latest rout, the long-term outlook for Bitcoin remains largely bullish, according to some market participants.

“FalconX continues to see longer dated call buying across our derivatives desk as our clients are expecting higher prices in the second half of the year,” said Ravi Doshi, head of markets at the prime broker.

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