Home Cryptocurrency News Bitcoin (BTC USD) Cryptocurrency Price Falls After Swings Highlighted Risks

Bitcoin (BTC USD) Cryptocurrency Price Falls After Swings Highlighted Risks

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Bitcoin slid Tuesday after a bout of volatility highlighted lingering doubts about the durability of the token’s mesmerizing rally.

The cryptocurrency fell as much as 11% to below $50,000. At one point Monday the digital currency plunged 17% before paring the worst of the slide. It’s still up some 400% in the past year, a rise that dwarfs other assets.

Treasury Secretary Janet Yellen and Microsoft Corp. co-founder Bill Gates were the latest to weigh into a debate over the digital coin. Gates cautioned about how investors can be swept up in manias, while Yellen said Bitcoin is an “extremely inefficient way of conducting transactions.”

In the background are jitters that the global economic recovery from the pandemic will eventually prompt central banks to dial back easy-money policies that helped propel Bitcoin higher. At a technical level the digital currency looks stretched, according to Miller Tabak + Co.

A monthly Bitcoin relative strength index signals it is overbought

A monthly relative-strength index for Bitcoin is “extremely overbought,” the company’s chief market strategist Matt Maley wrote in a weekend note.

Gates and Yellen muscled in on a Bitcoin discussion that of late had been dominated by Tesla Inc. Chief Executive Officer Elon Musk. In recent tweets, Musk said Bitcoin prices “seem high,” having earlier called it a “less dumb” version of cash.

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