- Bitcoin plummeted as much as 17% on Monday, its biggest single-day decline since March.
- Bitcoin hit a record high of $34,792.47 on Sunday. The cryptocurrency had soared by 171% in the fourth quarter and by 305% in 2020.
- Some analysts said that after the stellar gains of the past month, some crypto coins such as Bitcoin and Ethereum were due for a downward correction.
- Ethereum soared by as much as 22% on Monday as Bitcoin faltered.
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Bitcoin plunged as much as 17% on Monday, its biggest single-day decline since March. It fell back below $30,000 at intraday lows after hitting a record high of $34,792.47 on Sunday.
The cryptocurrency is experiencing severe volatility on the heels of a 171% surge in the fourth quarter of 2020. Bitcoin also notched astronomical gains in 2020; its 305% return made it one of the top-performing assets of the year.
Meanwhile, Ethereum, the second-largest cryptocurrency by market capitalization after Bitcoin, rose by as much as 22%, to $1,161.36, its highest level since 2018. Ethereum performed even more robustly than Bitcoin in 2020, rising more than 600%.
“The long-term outlook for both bitcoin and Ethereum remains skewed to the topside,” said Daniel Moss, an analyst at DailyFX. “However, both cryptocurrencies could be at risk of a near-term pullback as their respective surges appear relatively overextended.”
Despite Bitcoin’s Monday struggles, some experts expect a weak dollar, turbulence across traditional financial markets, and a greater shift in business and commerce online to help fuel further gains. A growing number of prominent investors and entrepreneurs have thrown their weight behind it, including Twitter CEO Jack Dorsey, Paul Tudor Jones, and even Ray Dalio, who had been something of a crypto skeptic.
A key catalyst in 2020 was the online payments company PayPal allowing its users to buy and sell Bitcoin across its platform.