ReutersSummary List Placement
Bitcoin tumbled back below $32,000 as a brief weekend uptrend gave way to another bout of selling.
Bitcoin traded at $31,885.49 as of 12:15 p.m. ET Sunday, down 0.9% from 24 hours ago. The world's largest cryptocurrency has struggled to find a floor as volatile price swings cut into investor bullishness. The token notched its biggest one-week plunge since September on Saturday, and downward momentum continues to wipe out key support levels.
Several bearish developments weighed on bitcoin in recent sessions. The cryptocurrency plunged on Thursday after a report by BitMEX Research suggested a flaw allowed for an instance of "double spend," or a user spending the same bitcoin twice. The cryptocurrency community largely rejected the report and said the supposed flaw was simply a common occurrence in the bitcoin blockchain.
Yet the damage was already done, and the token has yet to retake the highs from before the report's release.
Commentary from Treasury Secretary-designate Janet Yellen also curbed bitcoin's momentum. The former Federal Reserve chairwoman said on Wednesday the government should consider "curtailing" cryptocurrencies like bitcoin to prevent their use in illicit financing. Investors viewed the statement as a sign the Biden administration could take a more hostile approach toward regulating bitcoin.
"We need to make sure that our methods for dealing with these matters, with terrorist financing, change along with changing technology," Yellen said.
To be sure, bitcoin sits nearly 11% higher year-to-date and stands above the critical $30,000 support level. The cryptocurrency spiked through early January to a record-high of nearly $42,000 before profit-taking dragged on prices.
Volatility in the cryptocurrency market has cooled somewhat, and bitcoin now trades in a narrowing trading range around $32,000. While the token's steady downtrend has wiped out billions from its market cap, some believe its calmer price action can attract more investors in the coming weeks.
"Bitcoin will remain volatile and if it can continue to consolidate between $30,000 and $40,000, many crypto traders will argue the longer-term bullish trend is intact," Edward Moya, senior market analyst at Oanda, said.
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