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Bitcoin slumps 8% as it heads for bruising monthly drop

ForexMay 28, 2021 07:27AM ET

(C) Reuters. FILE PHOTO: Representations of virtual currency Bitcoin are placed on U.S. Dollar banknotes in this illustration taken May 26, 2020. REUTERS/Dado Ruvic

By Tom Wilson

LONDON (Reuters) – Bitcoin slumped on Friday to its lowest this week, taking losses sparked by a growing crackdown in China and environmental concerns to almost 40% so far this month.

The biggest cryptocurrency extended earlier losses, falling as much as 8.2% to $35,339 as it stayed pinned in this week’s relatively tight trading range. It was last down 6.2%.

“Bitcoin is currently in a bit of ‘slumber mode’ trading in the range of $34,000 and $40,000,” said Ulrik Lykke, executive director at crypto hedge fund ARK36.

“Many traders are acknowledging that price seems to be range-bound for the moment, why they may be hesitant to take a position with high conviction.”

The cryptocurrency has lost 37% in May, which if sustained would be its worst monthly performance since September 2011.

Its drop was triggered by China’s efforts to crack down on mining and trading of cryptocurrencies, and Tesla (NASDAQ:TSLA)’s move to halt payments over worries about energy use.

Energy regulators in China’s Sichuan will soon meet local power companies to gather information on cryptocurrency mining, an official said on Thursday, potentially leading to a clampdown in the country’s second-biggest bitcoin production hub.

Still, bitcoin has eked out a gain of around 3% so this week. Crypto markets trade 24/7, with volatility common at weekends.

Smaller coins, which typically rise and fall in tandem with bitcoin, also slumped. Second largest digital token ether fell as much as 11% to a four-day low.

Bitcoin slumps 8% as it heads for bruising monthly drop

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