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Bitcoin faltered on Friday and was on track for the sharpest weekly decline since September as concerns about regulation and its frothy rally made a setback from recent record highs.
The world’s most popular crypto-currency fell more than 5% early in the session in Asia to a near-three-week low of $ 28,800, before rising to near $ 32,000. It has lost 11% so far this week, the biggest drop since a 12% drop in September.
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Traders said a report posted by BitMEX Research on Twitter indicated that a portion of a bitcoin may have been spent twice, enough to cause sales, even if problems were resolved later.
“You do not want to rationalize too much in an inefficient and immature market like bitcoin, but there is definitely a turnaround in momentum,” said Kyle Rodda, an analyst at IG Markets in Melbourne, in the wake of the BitMEX report.
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“The herd probably looked at this 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 two weeks ago, and has lost ground amid growing concerns that it is one of a number of price bubbles, and since cryptocurrencies are attracting regulators’ attention.
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During a U.S. Senate hearing Tuesday, Janet Yellen, President Joe Biden, the leader of the U.S. Treasury, expressed concern that cryptocurrencies could be used to fund illegal activities.
This follows a call last week from Christine Lagarde, president of the European Central Bank, for global regulation of bitcoin.
However, some have said the retreat has the territory for an asset that is about 700% higher than the 2020 low of $ 3,850 in March.
“It’s a very volatile piece,” said Michael McCarthy, strategist at CMC Markets in Sydney. “It has made extraordinary profits and it does what bitcoin does and swings.”
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The second-largest cryptocurrency etherum initially slipped to a one-week low on Friday before rising 6% to $ 1,177 late in the Asian session.
(Reported by Tom Westbrook; edited by Leslie Adler and Simon Cameron-Moore)