Bitcoin fell below a closely watched price level as the slide in the largest cryptocurrency from its record high extended into a fifth week.
The digital asset dropped as much as 8.4 per cent to $45,773 on Monday in New York trading. By 8.15am UAE time on Tuesday, Bitcoin had pared back some of those losses to trade 3.79 per cent down at $47,102, according to CoinDesk.
However, the decline pushed it below its average price over the past 200 days, which currently stands around $46,720.
The Bloomberg Galaxy Crypto Index fell as much as 7.4 per cent to its lowest since early October while popular DeFi tokens such as Solana, Cardano and Polkadot fell even more.
“The idea that as it matured, the volatility would ease has not really materialised,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “The volatility is deadly and its other supposed attributes, [such as] a hedge against inflation, seems spurious.”
Bitcoin has dropped for four consecutive weeks as measured by the seven days ended Friday. Unlike most traditional asset classes and securities, digital tokens trade around the clock, often on lightly regulated online exchanges worldwide.
Bitcoin received a brief boost on Friday after a report showed US consumer prices accelerated, supporting the argument that the coin is a hedge against the erosive effects of inflation.
On December 4, the token fell as much as 21 per cent before recouping around half the loss hours later. It is still down about 30 per cent from its record high of about $69,000 that was reached on November 10.
Proponents have long argued that Bitcoin and other digital assets, on account of their being an idiosyncratic asset class, could act as hedges against swings in other areas of the financial market.
Only 21 million Bitcoin will be put into circulation under the computer protocol that governs issuance, although that figure is not expected to be reached for another 100 years.
