bitcoin: Bitcoin drops below $30,000 level as head-turning rally stalls

Bitcoin fell below $30,000 as it continues to retreat from the record highs reached during a furious rally over the past two months.

The world’s largest cryptocurrency dropped as low as $29,327 as of 8:29 a.m. in Hong Kong on Friday, after a slide of almost 11 per cent a day earlier. Commentators have cautioned that a sustained drop below $30,000 could presage further losses in the wake of last year’s 300 per cent surge.

“This level looks very vulnerable and a break below it is bad news in the near-term for Bitcoin and cryptos in general,� Craig Erlam, senior market analyst at Oanda Europe, wrote in a note Thursday. “I wouldn’t be surprised to see a test of $20,000 before too long.�

Bitcoin has seen a stellar rally as prices more than doubled after passing $20,000 for the first time in December. It broke above $30,000 in early January before peaking close to $42,000. Volatility then picked up as the digital asset tumbled.

The crypto boom has proved controversial, cheered on the one hand by believers who see Bitcoin becoming a more mainstream investment, but decried by others that see little more than speculative mania.

Grayscale Investments, which is behind a popular Bitcoin trust, saw total inflows of more than $3 billion across its products in the fourth quarter. Just this week, BlackRock Inc. dipped its toe into the crypto universe for the first time, saying cash-settled Bitcoin futures are among assets that two funds were permitted to buy.