Bitcoin dipped on Friday as less volatile trading pulled prices back below $35,000 after clearing $40,000 the day prior.
BThe cryptocurrency fell as much as 11%, to $34,409.04, at intraday lows.. The week’s choppy price action saw the cryptocurrency rise as high as $41,440 and fall as low as $30,324. The market froth made for the second most volatile week in the last three years.
After clearing its 2017 peak in December and doubling to nearly $42,000 in the new year, bitcoin has fluctuated as investors weigh securing profits against missing out on additional gains. The token currently trades roughly 25% higher year-to-date but about 11% below its early January record.
A growing chorus of voices deemed the crypto trade a bubble throughout the week, likening it to the dot-com boom of the 1990s. Billionaire entrepreneur Mark Cuban said the token has traded “exactly like the internet stock bubble” that surged to extreme valuations before crashing in the early 2000s.
European Central Bank president Christine Lagarde, who sees a digital euro becoming reality in the next couple of years, said this week Bitcoin is not a currency but a “highly speculative asset which has conducted some funny business.”
Strategists have also tamped down on some of the hype surrounding bitcoin’s rally.
“Wall Street just drools over the word ‘crypto’ any time it sees it without understanding any of this at all. It’s not a surprise Wall Street does so, as anything that shows an exponential price increase would get their interest,” Michael Every, a global strategist at Rabobank, said.
Technical analysts have said the price is fluctuating between support levels that could pave the way for record highs or a far deeper retreat. The Relative Strength Index for bitcoin – which tracks momentum over the last 14 days – only recently fell below levels indicating the token was overbought.
“While $35,000 may provide an interesting test, the only level that really matters is $30,000. A break of this could trigger a much sharper correction,” Craig Erlam, senior market analyst at Oanda Europe, said.
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