Bitcoin slumped, undoing some of this year’s epic rally and amplifying a recent trend of outsized weekend moves.
The largest cryptocurrency fell more than 18 per cent from Friday to trade at US$10,294 as of 11:58 a.m. in New York, according to prices compiled by Bloomberg. It’s still up almost 200 per cent since the start of the year. Most other large coins also dropped, with Bitcoin Cash and Dash declining at least 7.6 per cent. Litecoin erased an earlier gain.
Optimism surrounding a potential increase in adoption of cryptocurrencies helped fuel price increases on Bitcoin last month. That took prices back to levels last seen at the start of 2018. The slide over the weekend is at odds with recent moves higher on Saturday and Sunday: surges in weekend activity since the start of May accounted for about 40% of Bitcoin’s price gains this year, according to data compiled by Bloomberg.
Raising the possibility that central banks may feel the need to create tokens, Bank for International Settlements General Manager Agustin Carstens said in an interview with the Financial Times that it may be “sooner than we think that there is a market and we have to create our own digital currencies.”
Technical indicators also paint a rosy picture. Based on the GTI Vera Band Indicator, which identifies upward or downward trends, Bitcoin still remains in an uptrend and may continue to test new highs. The token held above US$9,860, the lower band limit, which indicates the point of a trend change.
The largest digital token has repeated this pattern before: since January, Bitcoin has on multiple occasions reached new yearly highs after breaking above the upper band and then reverting sharply. Those moves were then again followed by new highs after a consolidation phase. Repeating this pattern once more would mark the fifth such occasion.
--With assistance from Kenneth Sexton, Rita Nazareth and Brendan Walsh.
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