Photographer: Andrey Rudakov / Bloomberg
Photographer: Andrey Rudakov / Bloomberg
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Bitcoin resumed on Wednesday as the digital currency is heading for its worst week since March last year, raising a question about the outlook for the cryptocurrency.
Bitcoin fell to 6.8% to about $ 32,359 before increasing some losses. The largest cryptocurrency has swept investors over the past few days, hitting a record close to $ 42,000 on January 8 and then falling to a low of around $ 30,300.
The price fluctuations evoke memories of Bitcoin’s bubble in December 2017, followed by a rapid collapse. They also test recent narratives, such as the argument that Bitcoin is falling into a hedge against dollar weakness and inflation risk, and attracting investors in the longer term.
An alternative view is that fast money making quick gains has helped drive the quadrupling of Bitcoin over the past year, exposing the rally to the risk that such investors will decline as momentum declines.
“To take some profits off the table after a asset – any asset, not just Bitcoin – doubles in value within three weeks is completely understandable,” said Julius de Kempenaer, senior technical analyst at StockCharts. .
The shake-up dragged the total market value of cryptocurrencies to about $ 930 billion, less than a week after reaching $ 1 trillion for the first time, tracker CoinGecko data shows. CoinGecko’s figures cover more than 6,000 coins.
Flirt with $ 1 billion
The rise of Bitcoin briefly moved the cryptocurrency sector past the milestone
Source: CoinGecko-data
Bitcoin can reach JPMorgan Chase & Co. ‘s strategies said this month that it’s $ 146,000 in the long run competing with gold as an asset class if the digital asset swings enough to attract more institutional investors. They also noticed signs of foaming that could lead to a setback in the short term.
Some analysts are watching to see what happens to the dollar as they try to work out the way forward for cryptocurrencies.
According to Vijay Ayyar, head of business development at crypto exchange Luno in Singapore, Bitcoin might have risen by about $ 40,000 if the US dollar index climbed to 92 from the current level of about 90.
The broader Bloomberg Galaxy Crypto Index declined 2% in London on Wednesday.
– With help by Eric Lam