SINGAPORE: Bitcoin fell sharply on Friday and was heading towards its biggest weekly decline since last March, as concerns about technology and regulations pushed it back from recent record highs.
The world’s most popular cryptocurrency plunged more than 5% to its lowest level in nearly three weeks at $ 28,800 in the Asia session, before settling at around $ 30,000.
It has lost 15% so far this week, the biggest drop since falling 33% in March.
Traders said a report published by BitMEX Research on Twitter, indicating that a portion of bitcoin may have been spent twice, has damaged confidence in the technology behind the asset class and also that the decline was late after a big rally.
“You wouldn’t want to justify too much in an ineffective and immature market like Bitcoin, but there is definitely a reversal in momentum,” said Kyle Roda, an analyst at IG Markets in Melbourne, following the BitMEX report.
“Maybe the herd looked at this and thought it looked scary and shocking and now it’s time to sell it.”
Bitcoin is now about 30% lower than a record high of $ 42,000 hit two weeks ago, as it lost ground amid mounting concerns that it was one of a number of financial market price bubbles as digital currencies attract the attention of regulators.
During a US Senate hearing on Tuesday, Janet Yellen, chosen by President Joe Biden to head the US Treasury, expressed her concerns about cryptocurrencies being used to finance illegal activities.
This followed last week’s call from European Central Bank President Christine Lagarde for global regulation of Bitcoin.
However, some said the decline comes with the asset area nearly 700% higher than the 2020 low of $ 3,850 recorded in March.
“It’s a very choppy bit,” said Michael McCarthy, a strategist at CMC Markets, a brokerage in Sydney. “It has made extraordinary gains doing what bitcoin does and is swinging.”
The second largest cryptocurrency Ethereum also fell to its lowest level in one week, at $ 1041.22, before recovering flat around $ 1,144.