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Friday May 21 2021

Bitcoin under pressure as comeback fades


Bitcoin fell 3 per cent on Friday, giving up gains from the Asia session, as its recovery from this week's plunge shows signs of faltering. 

Bitcoin fell to $39,262 on the Bitstamp exchange. That is roughly 30 per cent above its Wednesday low, but just below its 200-day moving average. Rival cryptocurrency ether also came under pressure on Friday, falling 2 per cent to $2,714.

Ether is down 24 per cent for the week and bitcoin down 15 per cent.

Bitcoin markets operate 24/7, setting the stage for price swings at unpredictable hours, with retail and day traders driving those moves.

Read more: Bitcoin takes a hit after China introduces new crypto rules

The offloading in crypto world has coincided with a surge in gold, which has hit 4-1/2 month highs and is on track for three straight weeks of gains, rising 1.8% so far this week.

A narrative of bitcoin becoming “digital gold” had gained traction earlier this year, with JPMorgan saying in January that bitcoin emerged as a rival to gold.

But Societe Generale questioned the comparison on Thursday: “Bitcoin has clearly ‘outshone’ gold both to the upside and now also to the downside. But with such a gap in volatility and amplitude, does it make sense to compare the two assets at all?”