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SINGAPORE: Bitcoin faltered on Friday (Jan 22) and was heading towards its steepest weekly drop since September as regulatory concerns and its sparkling rally fueled a pullback from recent all-time highs.
The world’s most popular cryptocurrency fell more than 5 percent to a nearly three-week low of $ 28,800 at the start of the Asia session, before stabilizing near $ 32,000. It has lost 11 percent so far this week, the biggest drop since a 12 percent drop in September.
Traders said a report posted on Twitter by BitMEX Research suggesting that part of a bitcoin may have been spent twice was enough to trigger the sale, even if the concerns were later resolved.
“I wouldn’t want to over-rationalize in a market that is as inefficient and immature as bitcoin, but there is certainly a reversal in momentum,” said Kyle Rodda, an analyst at IG Markets in Melbourne, in the wake of the BitMEX report.
“The pack has probably seen this and thought it sounded scary and shocking and now is the time to sell.”
Bitcoin was trading more than 20 percent below the record high of $ 42,000 it hit two weeks ago, losing ground amid growing concern that it is one of several price bubbles and that cryptocurrencies are catching the eye of investors. regulators.
During a hearing in the United States Senate on Tuesday, Janet Yellen, chosen by President Joe Biden to head the United States Treasury, expressed concern that cryptocurrencies could be used to fund illegal activities.
That followed a call last week from the president of the European Central Bank, Christine Lagarde, for global regulation of bitcoin.
Still, some said the pullback comes with the territory of an asset that is 700% above the 2020 low of $ 3,850 reached in March.
“It’s a very volatile piece,” said Michael McCarthy, strategist at CMC Markets brokerage in Sydney. “It made extraordinary profits and is doing what bitcoin does and swinging.”
Ethereum, the second-largest cryptocurrency, initially fell to a week-long low on Friday before rising 6% at the end of the Asia session to $ 1,177.
