Bitcoin is aiming for the worst weekly loss in months

SINGAPORE (Reuters) – Bitcoin crashed on Friday and was aiming for its sharpest weekly fall since September, as concerns over regulation and its dirty rally drive back from recent highs.

FILE PICTURE: Bitcoin virtual currency representation is seen in front of a stock graph in this photo taken on November 19, 2020. REUTERS / Dado Ruvic / File Photo

The world’s most popular cryptocurrency fell more than 5% to a nearly three-week minimum of $ 28,800 early in the Asia session, before standing at close to $ 32,000. It has lost 11% so far this week, the biggest fall since a 12% fall in September.

Traders said a report posted to Twitter by BitMEX Research here suggesting that part of bitcoin could have been spent twice was enough to trigger a sale, even if concerns were later resolved.

“You wouldn’t want to rationalize too much into a market that is as inefficient and immature as bitcoin, but there’s certainly a reversal of momentum,” said Kyle Rodda, an analyst at IG Markets in Melbourne, following the BitMEX report.

“The herd probably looked at this and thought it sounded scary and shocking and now is the time to sell.”

Bitcoin was trading more than 20% lower than an all-time high of $ 42,000 and struck two weeks ago, losing ground amid growing concerns that it was one of a number of price bubbles and as cryptocurrencies caught the attention of regulators.

During a US Senate hearing on Tuesday, Janet Yellen, President Joe Biden’s choice to head the US Treasury, expressed concerns that cryptocurrencies could be used to fund illegal activities.

That followed a call last week by European Central Bank President Christine Lagarde for global regulation of bitcoin.

Still, some said the downside comes with the territory for an asset that is about 700% higher than the 2020 minimum of $ 3,850 struck in March.

“It’s a very volatile piece,” said Michael McCarthy, a strategist at GDP Markets Brokerage in Sydney. “He made some amazing gains and is doing what bitcoin is doing and swinging around.”

Ethereum’s second-largest cryptocurrency slipped internally to a minimum week on Friday before rising 6% late in the Asia session to $ 1,177.

Reporting by Tom Westbrook; editing by Leslie Adler & Simon Cameron-Moore