Bitcoin slumped 7% to near $35,500, recalling levels seen in the crypto meltdown last week as traders brace for fresh volatility over the long weekend.
Prices across digital tokens took a hit as Bank of Japan Governor Haruhiko Kuroda joined a growing list of central bankers expressing skepticism about the industry’s usefulness in the real world.
Now, retail players are set to dominate the coming trading sessions on typically thin exchange volumes.
“Looking at the unrest across the crypto market, there is a chance that we see another hectic weekend trading in Bitcoin and other cryptocurrencies,” said Ipek Ozkardeskaya, a senior analyst at Swissquote.
Prices spiked 10% last Saturday, only to plunge by 18% the next day.
“Most of the trading is speculative and volatility is extraordinarily high,” Kuroda said in an interview Thursday. “It’s barely used as a means of settlement.”
Kuroda Joins Chorus of Central Bankers Casting Doubt on Bitcoin
All the same, Bitcoin was little changed for the week, after a 44% selloff from the April’s peak of $63,000.
More broadly, the threat of tougher regulation continues to be a drag on crypto market sentiment. China and Iran have cracked down on Bitcoin mining operations for using too much electricity and there’s speculation that the U.S. policymakers may increase financial oversight given the market’s growing size and intense volatility.
On a technical level, the key marker is $30,000, said Swissquote’s Ozkardeskaya. A break below that level would be “further affirmation of an extended bear market,” she said.
“Volatility has eased this week, but that probably won’t last entering a long weekend,” Edward Moya, senior market analyst at Oanda Corp., wrote in a note. “Bitcoin’s consolidation phase should continue, but if the $37,000 level breached momentum, it could get ugly fast.”