A surge in bitcoin prices that took it well above $8,000 appears to be coming to a halt, wotj the world’s No.1 crypto asset running into sudden and sharp selling pressure within the past 24 hours.
Bitcoin BTCUSD, -8.68% hit an intraday low of $6,688.78 at 11 p.m. Eastern Time on Thursday, plunging from a 24-hour peak a $7,947.84, a roughly 16% drop, according to research and data site CoinDesk.
The digital asset has since steadied midday Friday at around $7,200, but the tumble has led at least one technical analyst to say that the decline has done a lot of harm to bitcoin’s near-term bull case.
“I think the drop has caused a lot of technical damage in the short term and the way it dropped is kind of a reminder that things like that can happen again,” Fawad Razaqzada, analyst at Forex.com, told MarketWatch.
The stumble for the digital asset comes after bitcoin has been on a virtual tear. Bitcoin futures BTCK9, -10.03% trading on Comex have climbed more than 95% year-to-date, according to FactSet data. By comparison, the Dow Jones Industrial Average DJIA, +0.17% has risen 11% so far this year, the S&P 500 index SPX, +0.01% has gained 14.5% and the Nasdaq Composite Index COMP, -0.29% has advanced 18.5% over the same period.
It was a resurgence in bitcoin that has revived enthusiasm among cryptocurrency enthusiasts, but Razaqzada said that that surge had gone too far, too fast from a technical standpoint and needed to correct itself.
“The price of bitcoin has skyrocketed about 50% so far this month to a high of $8390, following a 28% rally the month before. The cryptocurrency has surged past its 200-day moving average, all the way down at around $4440,” wrote the Forex.com analyst on Thursday, before bitcoin’s retreat.