Bitcoin Drops Close to $30,000 Mark as Head-Turning Rally Stalls

A crane arm lifts a bitcoin sculpture made from scrap metal as it is installed outside the BitCluster cryptocurrency mining farm in Norilsk, Russia, on Sunday, Dec. 20, 2020. Norilsk may soon be famous for a different type of mining — it now hosts the Arctic's first crypto farm for producing new Bitcoins. Photographer: Andrey Rudakov/Bloomberg
A crane arm lifts a bitcoin sculpture made from scrap metal as it is installed outside the BitCluster cryptocurrency mining farm in Norilsk, Russia, on Sunday, Dec. 20, 2020. Norilsk may soon be famous for a different type of mining — it now hosts the Arctic’s first crypto farm for producing new Bitcoins. Photographer: Andrey Rudakov/Bloomberg (Andrey Rudakov/)

(Bloomberg) — Bitcoin neared the closely watched price threshold of $30,000 as it continues to retreat from the record highs reached during a furious rally over the past two months.

The world’s largest cryptocurrency traded at about $31,350 in Asia on Friday, after a slide of almost 11% a day earlier. Commentators have cautioned that a sustained drop below $30,000 could presages further losses in the wake of last year’s 300% surge.

“This level looks very vulnerable and a break below it is bad news in the near-term for Bitcoin and cryptos in general,” Craig Erlam, senior market analyst at Oanda Europe, wrote in a note Thursday. “I wouldn’t be surprised to see a test of $20,000 before too long.”

Bitcoin has seen a stellar rally as prices more than doubled after passing $20,000 for the first time in December. It broke above $30,000 in early January before peaking close to $42,000. Volatility then picked up as the digital asset tumbled.

The crypto boom has proved controversial, cheered on the one hand by believers who see Bitcoin becoming a more mainstream investment, but decried by others that see little more than speculative mania.

Grayscale Investments, which is behind a popular Bitcoin trust, saw total inflows of more than $3 billion across its products in the fourth quarter. Just this week, BlackRock Inc. dipped its toe into the crypto universe for the first time, saying cash-settled Bitcoin futures are among assets that two funds were permitted to buy.

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