What goes up must come down? Bitcoin investors may be asking themselves that question as the cryptocurrency fell sharply on Monday.
The price of bitcoin
was last down 13% to $35,600, according to prices quoted by CoinDesk. Losses were also seen on Sunday, when bitcoin tumbled from nearly $41,000 to just over $35,000, briefly bouncing before renewing its descent.
The action follows enthusiastic buying last week that pushed bitcoin near an all-time high of $42,000. Despite fresh selling, the cryptocurrency is still up 22% so far for 2021, handily beating a gain of 1.8% for the S&P 500
1.6% for the Dow Jones Industrial Average
and 2.4% for the Nasdaq Composite
Fellow cryptocurrencies have also seen a similarly bullish start to the year, with Ethereumâ€™s Ether
up 50% and Litecoin
gaining 15%. But those assets have similarly seen 16% and 20% drops, respectively, in the past 24 hours.
Institutional investors have been helping to drive the recent rally, and fans of the digital currency are convinced bicoinâ€™s gains could be more sustained than the surge of 2017, which saw prices climb from around $1,000 to $17,000, only to reverse those gains by the end of 2018.
Bitcoin enthusiasts believe the asset could better hold its value this time, after rampant central-bank money printing in 2020 aimed at helping economies recover from the deadly coronavirus pandemic.
The 24-hour bout of selling is nothing more than an overdue â€œhealthy correction,â€� Naeem Aslam, chief market analyst at AvaTrade, told clients in a note on Monday.
â€œBitcoinÂ prices are likely to find their support between $28K to $30K. This is not the time to panic but to look at this opportunity from a more optimistic lens as the bull run is not over yet, and it is still likely to make its journey to the upside,â€� he said.
In its â€œThe Flow Showâ€� report released last week though, Bank of America , raised the question as to whether bitcoinâ€™s price move represents the â€œmother of all bubbles.â€�Â