Bitcoin’s 2023 rally wobbles in sudden 7.5% drop towards US$40,000
BITCOIN delivered another bout of its notorious volatility in a sharp tumble towards US$40,000 amid a broader crypto sell-off.
The largest token sank as much as 7.5 per cent to US$40,521 before paring some of the losses to trade 4 per cent lower at US$42,095 as at 11.12 am in Singapore on Monday (Dec 11).
Smaller tokens such as Ether, XRP, Polkadot and Avalanche also fell. A gauge of the largest 100 digital assets shed about 4 per cent, the largest drop since Nov 22.
Bitcoin has been on a tear this year on expectations that regulators will allow the first US spot Bitcoin exchange-traded funds, widening the potential base of crypto investors. Bets that the Federal Reserve will cut interest rates next year also encouraged a rally in virtual currencies.
“Market leverage had risen materially,” said Sydney-based Richard Galvin, co-founder at Digital Asset Capital Management. “The current fall looks like a market deleveraging as opposed to any fundamental news catalyst.”
Investors are also braced this week for US inflation data and the Fed’s final policy meeting of 2023, both of which could test aggressive wagers on rate cuts.
“It makes sense to see some profit taking,” said Tony Sycamore, a market analyst at IG Australia. He expects falls towards the US$40,000 to US$37,500 range to be “well-supported” by dip buyers.
Bitcoin has jumped more than 150 per cent this year, energising a wider digital-asset recovery from last year’s rout. But the token remains well below its 2021 pandemic-era record high of nearly US$69,000. BLOOMBERG
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