Over the past seven days, the world’s biggest cryptocurrency, bitcoin, is down more than 35 percent. On Sunday, the digital currency fell by as much as 10 percent, according to cryptocurrency tracker CoinDesk. As of 6 p.m. EST, the currency was trading at $3,945.
The 35 percent drop over the past week is the most since April 2013. The most well-known digital currency in the world started its drop in mid-November when it dropped below $6,000. Since then the cryptocurrency has failed to break out of the $4,000 range. The drop is a substantial reversal from October when Bitcoin comfortably traded around $6,500.
Last year around this time, bitcoin traded around $20,000 due to an influx of investors. The digital currency is now down more than 75 percent since its high in November 2017. Sentiment is starting to wane as more investors are pulling out of the once popular coin. Ether and XRP, two major cryptocurrencies, were down by as much as 12 percent.
Analysts speculate that once bitcoin began to trade below $4,000, traders may have started exiting their positions once “stop-losses” were triggered. A stop-loss is a predetermined price point that automatically sells a position once it drops by a certain percentage.
Some analysts point to regulatory crackdowns as another reason for the dramatic fall of bitcoin. The SEC filed a lawsuit against cryptocurrency founders for fraud and abuse, which is part of a wide net being cast to combat any suspected fraudulent activities.
Some reports indicate that bitcoin’s historical rise to nearly $20,000 last year was part of an elaborate scheme or some type of manipulation. An investigation is underway by the Department of Justice to see if the cryptocurrency tether, which is under heavy scrutiny for its 1:1 value against the dollar, had something to do with last year’s rapid rise.
