After an already brutal week, Bitcoin dropped again and was last down around 4% for the day, hovering around the $35,000 level. Ethereum – the second-largest token – was down some 7% in late-afternoon US trading.
Bitcoin, the world’s biggest and best-known cryptocurrency, is now about half its $69,000 peak in November. It was last at $35,049, after falling as low as $34,000 and following a steep fall on Friday.
The currency has had wild price swings and has been hit as risk appetite has fallen on inflation fears and anticipation of a more aggressive pace of interest rate hikes from the US Federal Reserve.
Other risk assets have fallen with stocks falling on Friday. The S&P 500 and Nasdaq recorded their biggest weekly percentage drops since the start of the coronavirus pandemic in March 2020.
Over the past seven trading days, Bitcoin has shed around 20% of its value compared with nearly 30% for Ethereum. Solana’s SOL and DeFi-play Avalanche’s AVAX token have fallen nearly 38% each.
Also, the wipeout in the memecoins has been profound– Dogecoin is down 30% on the week while Shiba Inu is off 38%, according to CoinMarketCap.
In a research note, Edward Moya, senior market analyst for the Americas at OANDA, said bitcoin was falling as “crypto traders de-risk portfolios following the bloodbath in stocks” and in advance of next week’s Federal Reserve policy meeting.
“Bitcoin remains in the danger zone and if $37,000 breaks, there is not much support until the $30,000 level,” Moya wrote.
Ether, the coin linked to the ethereum blockchain network, dropped 6.7% to $2,396 on Saturday)
Meanwhile, the Joe Biden administration is preparing to release an initial government-wide strategy for digital assets as soon as next month and task federal agencies with assessing the risks and opportunities that they pose.
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