Cryptocurrency Bitcoin Heads For Its Worst Week In Months

Bitcoin was down 1.6 per cent at $55,980 by mid-session in Asia, its lowest since mid-October and 20 per cent below last week’s record high

Representational image | Photo: Getty

New Delhi: Bitcoin, the largest cryptocurrency by market value, slumped to a one-month low on Friday.

According to a report in Reuters, the cryptocurrency headed for its worst week in six months because traders have booked profits from a long rally and been spooked by an expectation that creditors of collapsed crypto exchange, Mt Gox, might liquidate their payments.

Bitcoin was down 1.6 per cent at $55,980 by mid-session in Asia, its lowest since mid-October and 20 per cent below last week’s record high.

Matthew Dibb, chief operating officer, Singapore-based crypto asset manager Stack Funds, said, “Selling pressure has been quite constant.” He expects it can continue until the token finds support at $53,000.

Bitcoin has dipped 14 per cent this week and through its 50-day moving average. The cryptocurrency has also gained over 90 per cent this year.

According to a Reuters report, Dibb was quoted saying that there was profit taking and concern about more selling in the wake of a Tokyo court signing off on plans to repay creditors of Mt Gox, a crypto exchange which collapsed in 2014 after losing half a billion dollars in bitcoin.

“Those affected will receive a large sum of bitcoin, likely happening in Q1 or Q2 of 2022. This has brought some fear into the market on a longer-term horizon,” he said, on the expectation that those creditors are likely sellers.

The second-largest cryptocurrency by market value, Ether, was steady near a three-week low at $4,014 on Friday, however, set for a 14 per cent weekly loss.

Both ether and bitcoin seem to have suffered as the mood in global markets has been cautious amid concerns about economic growth, interest rates, and inflation recently.

OANDA Analyst Edward Moya told Reuters, “Bitcoin’s long-term outlook remains bullish.” “But the waters over the next few months will be rough as institutional investors look to see if the Fed will be forced to raise rates sooner and trigger a broad-based selloff of risky assets that include bitcoin,” Moya added.