Bitcoin falls below US$3,500, loses one-third of its value in past week

Following a week of pain, bitcoin hit a new low for the year at US$3,447.58 on Nov 25.
Following a week of pain, bitcoin hit a new low for the year at US$3,447.58 on Nov 25.PHOTO: AFP

NEW YORK (BLOOMBERG) - The great crypto crash of 2018 plunged deeper over the weekend.

Following a week of pain, bitcoin hit a new low for the year at US$3,447.58 (S$4,740.85) on Sunday (Nov 25), according to CoinDesk. The world's biggest cryptocurrency is now down more than 35 per cent over seven days.

Cryptocurrencies just had their worst week ever. Bitcoin is 82 per cent below its high of US$19,666 almost a year ago, and Ripple declined 5.3 per cent to 35 cents, about 90 per cent below its peak.

After an epic rally last year that exceeded many of history's most notorious bubbles, digital currencies have become mired in an almost US$700 billion rout that shows few signs of abating. Many of the concerns that sparked the 2018 retreat - including increased regulatory scrutiny, community infighting and exchange snafus - have only intensified this week.

Last week, sources said regulators are investigating whether bitcoin's rally to almost US$20,000 last year was the result of market manipulation. The US Justice Department is investigating whether tether, a controversial cryptocurrency that founders say is backed 1:1 by the US dollar, was used by traders to prop up bitcoin, according to three unnamed sources familiar with the matter

Even after the steep losses, Oanda Corp's Stephen Innes has yet to see strong evidence of a capitulation that would signal a market bottom.

"There's still a lot of people in this game," Mr Innes, head of trading for Asia Pacific at Oanda, said by phone from Singapore last week. "If we start to see a run down towards US$3,000, this thing is going to be a monster. People will be running for the exits."

Mr Innes said his base-case forecast is for bitcoin, which turns 10 this year, to trade between US$3,500 and US$6,500 in the short term, with the potential to fall to US$2,500 by January.

But bitcoin isn't dead yet. Ohio is set to become the first state to accept the digital currency for tax bills, the Wall Street Journal reported. Beginning this week, Ohio businesses can register at OhioCrypto.com to pay wide range of sales taxes, the newspaper said, citing state treasurer Josh Mandel.