Bloomberg
(Bloomberg) -- Bitcoin closed in on the lowest in three weeks as the cryptocurrency’s sizzlying rally gives way to pessimism that prices are too high.Bitcoin tumbled as much as 8.3% in the European morning, sliding below $33,000. The largest digital asset has trended lower ever since breaking through $40,000, and losses have accelerated in the past two days.While soaring crypto prices fueled a speculative mania among the Robinhood crowd, it’s also made professional investors reluctant to buy at the top. Prices are still more than double the levels from early November and some technical analysts have argued that a retracement is overdue.“Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset,” wrote JPMorgan Chase & Co. strategists John Normand and Federico Manicardi in a report on Thursday. “Current prices are so far above production costs that mean-reversion lower in returns is a recurring concern.”Bitcoin was down 6.1% to $32,795 as of 11:19 a.m. in London. Prices are on track for their first back-to-back weekly decline since early October.Chart patterns suggest the market is consolidating within a “bullish pennant” formation, according to Matthew Weller, head of research at Gain Capital Group LLC. A sharp move higher could push prices above $50,000, while a break lower would point to a deeper retracement below $30,000, he predicted.“It would likely take a more severe drop to erase the established uptrend,” Weller wrote in a note.Despite the selloff, Wall Street hasn’t lost interest in the new asset class. On Wednesday, BlackRock Inc. filed paperwork to add Bitcoin futures as an eligible investment in two funds, the first time the money manager is offering clients exposure to cryptocurrency.BlackRock Takes First Step Into Crypto Exposure in Two FundsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
