Photographer: Andrey Rudakov / Bloomberg
Photographer: Andrey Rudakov / Bloomberg
Bitcoin resumed on Tuesday, as the digital currency is heading into its worst week since March last year, calling into question the prospects for the cryptocurrency boom.
Bitcoin fell as much as 6.8%, to about $ 32,359, before matching some losses, according to a price set compiled by Bloomberg. The largest cryptocurrency hit a record nearly $ 42,000 on Jan. 8 before falling to a low of around $ 30,300. The Bloomberg Galaxy Crypto index fell to 7.1%.
Price changes evoke memories of the December 2017 Bitcoin bubble that was followed by a rapid collapse. They also test recent narratives, such as the argument that Bitcoin is maturing in a hedge against the dollar’s weakness and inflation risk and that it attracts long-term investors.
An alternative view is that fast money seeking quick gains helped drive Bitcoin’s quadrupling over the past year, leaving the rally exposed to the risk of these investors withdrawing as the momentum slows.
“Taking some profits off the table after an asset (any asset, not just Bitcoin) doubles in value in three weeks is completely understandable,” said Julius de Kempenaer, a senior technical analyst at StockCharts.
Bitcoin could arrive In the long run, at $ 146,000, it competes with gold as an asset class if digital asset movements moderate enough to attract more institutional investors, JPMorgan Chase & Co. strategists said this month. They also marked signs of foam that could lead to a short-term setback.