The rise of bitcoin this week has been meteoric. Its decline just as fast.
Getting in and out is easy in the world of cryptocurrencies , where the bitcoin rush spiked to nearly $ 14,000 on Wednesday, the highest level since January 2018. The largest digital asset then changed course in a matter of minutes. after a major cryptocurrency market reported a service outage. The pullback accelerated on Thursday, bringing the price of the coin back to almost the same level as five days ago.
Rising prices brought back memories of the crypto bubble that burst in late 2017, when bitcoin and other cryptocurrencies, beset by regulatory setbacks and fraud-related issues, fell from grace. The price of bitcoin, for example, languished at around $ 3,600 just six months ago.
Cryptocurrency bulls perked up this year after numerous Wall Street heavyweights showed increased interest and acceptance of cryptocurrencies and the underlying blockchain technology, helping to drive prices. The trend turned parabolic earlier this month when Facebook Inc. revealed plans to introduce its own digital currency; Many proponents cited the move as a long-awaited validation of the potential for digital assets to dramatically disrupt the global financial system.
But Thursday’s reversal caused one of the biggest proponents of bitcoin Mike Novogratz to regret not taking more money off the table before the coin lost almost all of its gains. That could have contributed to its rapid decline, according to John Spallanzani, a portfolio manager at Miller Value Partners.
Bitcoin fell 19% on Thursday, reducing the loss to 16% at the end of the day. It was up 4.2% to $ 11,137 as of 10:50 am in Hong Kong on Friday. Bitcoin volatility is close to the highest levels since early 2018, when the bubble burst.
“It appears that the cryptocurrency market got too hot yesterday and is now cooling down,” wrote Mati Greenspan, a senior market analyst at trading platform eToro, in a comment. “What an incredible market, where the price can fall by around 15% in less than an hour and go back to the highs of the previous trading day.”
Other altcoins were also down on Thursday, with Ether and Litecoin down 14%. The Bloomberg Galaxy Crypto Index, which tracks a basket of the largest digital assets, fell 19%.