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Bitcoin expanded lower after the weekend rally to above $ 61,000

(Bloomberg) – Bitcoin extended its losses as it crossed $ 61,000 over the weekend, as a reminder to investors of the volatility of the digital currency.

The largest cryptocurrency fell 5.5% on Tuesday and was trading at around $ 55,200 as of 7:12 am in London. Bitcoin is still up around 1,000% over the past year, a staggering rise that has surpassed traditional assets like stocks and gold.

Saturday’s jump to a record high was partly linked to the optimism about US stimulus checks, as it could end up with some liquidity in the financial markets. Chart watchers have been looking for the digital currency to settle above thresholds like the previous peak of $ 58,350 in February, to boost confidence in the rally.

Vijay Ayar, head of the Asia-Pacific region at Luno cryptocurrency exchange in Singapore, said that investors are reaping some profits after Bitcoin’s recent gains, and it could bounce as high as $ 62,000 before falling again.

He said, “We will see a resumption of buying, given the upcoming stimulus and the stock markets starting to look good again.”

Bitcoin and other cryptocurrencies have returned to prominence over the past year amid signs of broader investor interest, such as buying $ 1.5 billion of Bitcoin from Tesla. Critics argue that the token may be in a speculative bubble driven by massive stimulus injections.

Expect a drop

The cryptocurrency craze is feeding into the pockets of the stock market. For example, shares related to digital asset mining and trading have surged, and in some cases even outnumbered Bitcoin – shares of Riot Blockchain Inc. And Marathon Digital Holdings Inc. By more than 8,700% over the past year.

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Atishanan Bolgs, CFO of Bitkub Capital Group Holdings Co., said: , Operator of the largest cryptocurrency exchange in Thailand: “There will definitely be some correction in Bitcoin and other cryptocurrencies as they have risen so much in a short period of time.”

“The long-term outlook remains very optimistic, as many leading financial institutions are considering adopting cryptocurrencies,” Atishanan said.

(Updates the markets in the second paragraph.)

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