Bitcoin hit investors by falling below $30 thousand for the first time since January and erasing the year’s gains before recouping the day’s losses.
The cryptocurrency closed the session in the New York markets slightly higher at around 32 thousand 900 dollars, after falling up to 12%. The wild journey continued afterwards, as the asset is traded 24 hours a day.
The virtual currency has lost more than 50% since its mid-April high of nearly $65 thousand. At the beginning of 2021, bitcoin began trading around 29 thousand dollars, having reached four times its value in 2020.
These types of ‘up and down’ trades indicate “that traders could find themselves in a whirlwind over the next few weeks,” said Sean Rooney, head of research at cryptoassets manager Valkyrie Investments.
A few weeks ago the cryptocurrency was favored by Wall Street and some retail investors. However, negative criticism about its energy consumption, Elon Musk’s statements, as well as China’s ‘drastic’ measures have pushed it down in recent weeks.
China’s latest attack came on Monday, when the Asian country’s central bank said it had summoned executives from the biggest lenders, as well as AliPay, to reiterate the ban on cryptocurrency services.
“The continued sale of bitcoin has contributed to a negative outlook by traders driven by bearish news from China,” said Nick Mancini, research analyst at Trade The Chain.
Exuberant upswings and rapid declines are no strangers to bitcoin and other cryptocurrencies. Bitcoin experienced a renaissance in 2017, rising more than a thousand percent only to lose about 75 percent in 2018.
“The most speculative part of the market is the cryptocurrency. In the end, what determines the value of bitcoin is acceptance and more demand and supply. When a country like China comes out against bitcoin, that really hurts its global acceptance and that’s why you’re seeing the value deteriorate as much as it has,” said Eric Diton, president and ceo of The Wealth Alliance.