Bitcoin losses gather pace, with prices nearing three-week low
[LONDON] Bitcoin closed in on the lowest in three weeks as the cryptocurrency's sizzlying rally gives way to pessimism that prices are too high.
Bitcoin tumbled as much as 8.3 per cent in the European morning, sliding below US$33,000. The largest digital asset has trended lower ever since breaking through US$40,000, and losses have accelerated in the past two days.
While soaring crypto prices fueled a speculative mania among the Robinhood crowd, it's also made professional investors reluctant to buy at the top. Prices are still more than double the levels from early November and some technical analysts have argued that a retracement is overdue.
"Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset," wrote JPMorgan strategists John Normand and Federico Manicardi in a report on Thursday. "Current prices are so far above production costs that mean-reversion lower in returns is a recurring concern." Bitcoin was down 6.1 per cent to US$32,795 as of 11.19 am in London. Prices are on track for their first back-to-back weekly decline since early October.
Chart patterns suggest the market is consolidating within a "bullish pennant" formation, according to Matthew Weller, head of research at Gain Capital Group. A sharp move higher could push prices above US$50,000, while a break lower would point to a deeper retracement below US$30,000, he predicted.
"It would likely take a more severe drop to erase the established uptrend," Mr Weller wrote in a note.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Despite the selloff, Wall Street hasn't lost interest in the new asset class. On Wednesday, BlackRock filed paperwork to add Bitcoin futures as an eligible investment in two funds, the first time the money manager is offering clients exposure to cryptocurrency.
BLOOMBERG
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Over S$646,000 spent to store, maintain, safeguard assets in money laundering case
Philippines eyes US$2 billion in its first global bond this year
UniCredit jumps past 60 billion euro market cap to join elite club
New Thai finance minister downplays row with central bank
China's CICC may cut investment banking headcount by at least 10% this year
Apac finance M&A to stay subdued after Q1 decline as uncertainties linger: S&P Global