After an already brutal week, bitcoin dropped again and was down almost 4% for the day, hovering around the $35,000 level. Ethereum – the second largest token – was down about 7% in afternoon US trading.
Bitcoin, the world’s largest and best-known cryptocurrency, is now almost halfway past its November peak of $69,000. It was at a low of $34,000 and at $35,049 after a steep drop on Friday.
The currency has fluctuated wildly and risk appetite has waned on fears of inflation and anticipation of a more aggressive rate hike from the US Federal Reserve.
Other riskier assets have tumbled on Friday, along with a fall in stocks. The S&P 500 and Nasdaq posted their biggest weekly percentage declines since the start of the coronavirus pandemic in March 2020.
Over the past seven trading days, bitcoin has dropped about 20% of its value, compared to around 30% for Ethereum. Solana’s SOL and DeFi-play Avalanche’s AVAX token are down nearly 38% each.
Furthermore, the wipeout in memecoins has been profound – according to CoinMarketCap, Dogecoin is down 30% in the week while the Shiba Inu is down 38%.
In a research note, Edward Moya, senior US market analyst at OANDA, said that bitcoin was falling as “a risky portfolio of crypto traders following the bloodbath in stocks” and ahead of next week’s Federal Reserve policy meeting.
Moya wrote: “Bitcoin is still in the danger zone and if it breaks $37,000, there isn’t much support near the $30,000 level.”
Ether, the coin tied to the Ethereum blockchain network, fell 6.7% on Saturday to $2,396)
Meanwhile, the Joe Biden administration is preparing to release an initial government-wide strategy for digital assets as soon as next month and is working to get federal agencies to assess their risks and opportunities.
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