SINGAPORE (Reuters) – Bitcoin fell heavily on Friday and was aiming for its sharpest weekly collapse since last March, as concerns over its technology and regulation plunge back from its most recent highs.
The world’s most popular cryptocurrency fell more than 5% to a nearly three-week minimum of $ 28,800 in the Asia session, before standing at 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 here, suggesting that part of bitcoin could have been spent twice, hurt confidence in the technology underpinning the asset class and also a handicap late after a huge rally.
“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 is now about 30% below its all-time high of $ 42,000 and 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 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.”
The second-largest cryptocurrency ethereum also fell to a one-week minimum, from $ 1,041.22, before improving to steady around $ 1,144.
Reporting by Tom Westbrook; edited by Richard Pullin and Leslie Adler