Photographer: Andrey Rudakov / Bloomberg
Photographer: Andrey Rudakov / Bloomberg
Bitcoin resumes falls Wednesday as the digital currency faces its worst week since March last year, casting doubt on the outlook for the cryptocurrency boom.
Bitcoin fell a whopping 6.8% to around $ 32,359, before making up for some losses, according to a Bloomberg-curated price. The largest cryptocurrency hit a record close to $ 42,000 on January 8, before dropping to a low of around $ 30,300. The Bloomberg Galaxy Crypto Index fell a whopping 7.1%.
The price swings are reminiscent of Bitcoin’s bubble of December 2017, which was followed by a rapid collapse. They are also testing recent stories, such as arguing that Bitcoin is maturing into a hedge against dollar weakness and inflation risk, attracting longer-term investors.
An alternative view is that fast money in search of quick profits has contributed to Bitcoin’s quadrupling in the past year, exposing the rally to the risk of such investors pulling back as momentum declines.
“Taking some profit off the table after an asset – any asset, not just Bitcoin – doubles in value within three weeks is perfectly understandable,” said Julius de Kempenaer, senior technical analyst at StockCharts.
Bitcoin could reach $ 146,000 in the long term as it competes with gold as an asset class if the swings in digital assets moderate enough to lure more institutional investors, JPMorgan Chase & Co. strategists said. this month. They also identified signs of foam that could lead to a relapse in the shorter term.