The largest digital token dipped as much as 8.2 per cent to $58,661, the biggest intraday drop since Sept 24. Second-ranked Ether tumbled more than 10 per cent.
Global crypto market cap has dropped some 10 per cent in the past 24 hours to $2.7 trillion, according tracker CoinGecko.
“After several days of gains, which saw Bitcoin hover near it’s all-time high as many other altcoins managed to reach new highs, we are seeing a significant pullback,” said Walid Koudmani, an analyst at XTB Market. “The extreme volatility that the market is prone to could lead to a potential domino effect if more negative news were to emerge and take prices to new lows.” Technical indicators had suggested the strong run of late across the notoriously volatile market was due for a pause.
Some analysts also attributed the dip to new tax-reporting requirements for digital currencies that are part of the $550 billion infrastructure bill, which President Joe Biden signed into law Monday.
“We’ve seen the US infrastructure bill get signed, which has initiated a selloff from traders who are concerned about regulation and taxation,” said Hayden Hughes, chief executive officer of Alpha Impact, a social-trading platform.
Hughes also cited concerns about China continuing its regulatory crackdown. The country will study the option of levying punitive power prices for companies that are involved in cryptocurrency mining, National Development and Reform Commission spokeswoman Meng Wei said at a press conference. Meanwhile, Twitter Chief Financial Officer Ned Segal said on Monday with Dow Jones that it didn’t make sense to invest the company’s cash in crypto assets such as Bitcoin.