Bitcoin shook on Friday and headed for its sharpest weekly decline since September, as concerns about regulation and its sparkling rally caused a retreat from the last record highs.
The world’s most popular cryptocurrency fell more than 5 percent to a nearly three-week low of $ 28,800 at the start of the Asian session before holding at nearly $ 32,000. So far, it has lost 11% this week, the biggest drop of 1
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Traders say a report posted on Twitter by BitMEX Research suggesting that part of the bitcoin may have been spent twice was enough to trigger sales, even if the concerns were later resolved.
“You wouldn’t want to rationalize too much in a market that’s as inefficient and immature as bitcoin, but there’s certainly a twist in momentum,” said Kyle Roda, an analyst at IG Markets in Melbourne, following the BitMEX report.
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“The herd probably looked at it and thought it sounded scary and shocking, and now is the time to sell.”
Bitcoin traded more than 20% below the record high of $ 42,000 reached two weeks ago, losing ground amid growing fears that it is one of a number of price bubbles and as cryptocurrencies attract the attention of regulators.
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During a U.S. Senate hearing on Tuesday, Janet Yellen, who was elected by President Joe Biden to head the U.S. Treasury, expressed concerns that cryptocurrencies could be used to fund illegal activities.
This followed a call by European Central Bank President Christine Lagarde last week for global regulation of bitcoins.
However, some say the withdrawal comes with territory for an asset that is about 700% above the 2020 low of $ 3,850 reached in March.
“It’s a very volatile piece,” said Michael McCarthy, a strategist at CMC Markets in Sydney. “He made tremendous profits and did what bitcoin does, and he swung around.
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Ethereum, the second-largest cryptocurrency, actually fell to a one-week low on Friday before rising 6 percent at the end of the Asian session to $ 1,177.
(Report by Tom Westbrook; edited by Leslie Adler and Simon Cameron-Moore)