Digital Coins Resume Selloff After One-Day Recovery Fizzles

(Bloomberg) -
(Reuters/Dado Ruvic/Illustration/File)

The biggest cryptocurrencies resumed their decline on Sunday, almost a week after bitcoin ended its unprecedented rally by failing to break above $20,000.

“The West is what’s causing this selloff,” said Mati Greenspan, senior market analyst at Tel Aviv-based online broker eToro. The recent cryptocurrency rally was so steep that investors were prone to take money off the table going into the end of year, he said.

A rebound fizzled Saturday afternoon and traders turned pessimistic again, driving bitcoin down 13 percent in the past 24 hours. The drop among the 10 largest digital coins, ranging up to 21 percent for iota, brings end-of-year weakness to a market that just had its worst four-day tumble since 2015.

The retrenchment isn’t typical for cryptos, which often snap back after a few losing sessions. The last time bitcoin dropped for five successive weekdays was September and, before that, July. While the market has been volatile for most of this year, the rapid run-up has made the recent selloff sting more.

Traders knocked about $160 billion in market value off the biggest cryptocurrencies in about three days, according to CoinMarketCap data.

Bitcoin was at $13,264 as of 2 p.m. London time. That’s almost one-third off its record high of $19,511, based on prices compiled by Bloomberg. Ethereum, the No. 2 cryptocurrency by market value, dropped 12 percent to $654.83 in the past 24 hours.

“The crypto market went to astronomical highs, so it’s got to come back to reality,” Greenspan said. “Something that goes up 150 percent in less than a month is probably going to have double-digit retracement.”