Two-Day Bitcoin Plunge Shakes Faith in Cryptocurrency Boom – Bloomberg
Two-Day Bitcoin Plunge Shakes Faith in Cryptocurrency Boom – Bloomberg
January 10, 2021, 10:57 PM EST Updated on January 11, 2021, 1:39 PM EST 2:59 Bitcoin’s Biggest Plunge Since March Shakes Faith in Crypto Boom By January 10, 2021, 10:57 PM EST Largest cryptocurrency fluctuates wildly after 26% plunge Renewed price volatility evokes memories of 2017 bubble Warnings Abound Over Market Mania LISTEN TO ARTICLE Tweet
A steep selloff in Bitcoin is fueling concern that the cryptocurrency bubble may be about to burst.
Bitcoin slid as much as 26% over Sunday and Monday in the biggest two-day slide since March. After dropping as much as 20% during New York trading hours on Monday, the price continued to fluctuate wildly. Bitcoin has wiped out about $185 billion in value since Friday, more than the market capitalization of 90% of individual companies in the S&P 500.
“It’s to be determined whether this is the start of a larger correction, but we have now seen this parabola break so it might just be,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.
Bitcoin has more than quadrupled in the past year, evoking memories of the 2017 mania that first made cryptocurrencies a household name before prices collapsed just as quickly. Prices almost reached $42,000 on Jan. 8 with retail traders and Wall Street investors clamoring for a piece of the action.
“It was a parabolic move,” said Matt Maley, chief market strategist at Miller Tabak + Co. “What happens with all parabolic moves? You see severe corrections.”While Maley sees Bitcoin moving much higher over the long term, it will still experience severe corrections along the way, he said.“It will still have big declines of anywhere from 30-60%,” he said. “And it’s going to happen more than once.”
Bitcoin slid 13% to around $33,159 as of 1:36 p.m. in New York. Other coins including Bitcoin Cash, Ether and Litecoin fell even more.
“Time to take some money off the table,” Scott Minerd, chief investment officer with Guggenheim Investments, said in a tweet from his verified Twitter account. “Bitcoin’s parabolic rise is unsustainable in the near term.” In late December, Minerd predicted Bitcoin could eventually reach
