Bitcoin plummeted as deep as 17% yesterday as investors grew weary of sky-high valuations, triggering the selloff of leveraged buys and sparking a downfall in cryptocurrency markets.
The world’s top cryptocurrency saw its largest daily drop in 30 days, falling to as much as $45,000. In scattered trading, it was lower by 15.6%.
The decrease brought its losses to more than a fifth away from its record high of $58,354 on Sunday and highlighted the instability of the digital asset – though it has still gained 60% this year.
“The rallies we’ve seen are not maintainable and just lead to setbacks like this,” said Craig Erlam, senior analyst at OANDA. “The market was extremely overbought.”
Ether, the second largest crypto by market size which often follows bitcoin, also fell by more than 20% to $1,410, which is down by 30% from last week’s peak.
Cryptocurrency has run hot this year as big investors and companies start to look at the emerging asset seriously, piling money into the market and supporting confidence among smaller speculators.
A $1.5 billion purchase by Tesla recently has aided bitcoin in reaching over $50,000 but may now cause pressure on the company’s stock as it becomes affected by bitcoin’s movements.