The joy of many crypto traders has been short-lived as Bitcoin fell heavily on Friday, heading toward its sharpest weekly drop since March 2020. as worries over its technology and regulation extended a pullback from recent record highs.
The world’s most popular cryptocurrency fell more than 5% to an almost three-week low of $28,800 in the Asia session, before steadying around $30,000. It has lost 15% so far this week, the biggest drop since a 33% fall in March.
Traders said a report posted to Twitter by BitMEX Research, suggested that part of a bitcoin may have been spent twice, and hurt confidence in the technology underlying the asset class and also that a pullback was overdue after a huge rally.
Kyle Rodda, an analyst at IG Markets in Melbourne, in the wake of the BitMEX report said:
You wouldn’t want to rationalise too much into a market that’s as inefficient and immature as bitcoin, but certainly there’s a reversal in momentum.
The herd has probably looked at this and thought it sounded scary and shocking and it’s now the time to sell.
Bitcoin is now around 30% below the record high of $42,000 it hit two weeks ago, losing ground amid growing concerns that it is one of a number of financial market price bubbles and as cryptocurrencies catch regulators’ attention.
READ ALSO: MORALE, LOW!!! 217 Soldiers Resign From Nigerian Army
During a US Senate hearing on Tuesday, Janet Yellen, President Joe Biden’s pick to head the US Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities.
That followed a call last week from European Central Bank President, Christine Lagarde, for global regulation of bitcoin.
Still, some said the pullback comes with the territory for an asset that is some 700% above the 2020 low of $3,850 hit in March.
Michael McCarthy, strategist at brokerage CMC Markets in Sydney, said:
It’s a highly volatile piece.
It made extraordinary gains and it’s doing what bitcoin does and swinging around.
Second-biggest cryptocurrency, Ethereum, also dropped to a one-week low, of $1,041.22, before recovering to steady around $1,144.
