Bitcoin falls after weekend rises to its highest point

NEW YORK / LONDON (Reuters) – Bitcoin fell on Monday after reaching its last record the day before, with a global stock liquidation restricting risk appetite, with some investors also citing concerns about the rapid rise in price of virtual currency.

Traders also pointed to the unfolding of highly leveraged long positions in the cryptocurrency.

The most popular cryptocurrency fell to $ 47,400, the lowest level in a week. At one point, it lost almost 17% of its value, or about $ 160 billion eliminated from its total market capitalization. Its market capitalization on Monday fell to $ 983 billion, after reaching more than $ 1 trillion on Friday.

Bitcoin fell 7.4% last time, to $ 53,385.

Bitcoin rose on Sunday to a peak of $ 58,354, with its latest series of price movements over the weekend taking its gains so far this year to almost 100%.

Tesla boss Elon Musk, whose tweets about bitcoin increased the cryptocurrency rally, said on Saturday that the price of bitcoin and ethereum seemed high.

Bitcoin is still up more than 80% this year. Since hitting a low in March below $ 4,000, bitcoin has risen by nearly 1,200%.

U.S. Treasury Secretary Janet Yellen added fuel to the fire on Monday, saying bitcoin is extremely inefficient in conducting transactions and is a highly speculative asset.

“The cross-border settlement this week is the result of part of the relaxation of last week’s exuberance, as well as a much-needed development of over-leveraged long positions,” said Ross Middleton, co-founder of the DeversiFi cryptocurrency exchange.

The cryptocurrency’s ethereum rival, which tends to move in conjunction with bitcoin, also plummeted after reaching a historic record on Saturday. It hit a three-week low on Monday and fell 10% to $ 1,743.

Bitcoin’s meteoric rise to over $ 50,000 has been fueled by signs that it is gaining acceptance among major investors and companies, from Tesla Inc and Mastercard Inc to BNY Mellon.

“We tend to think there is a good chance of a bearish week and a small correction as a result, although it does little to weaken the medium-term outlook,” said Joseph Edwards of Enigma Securities, a cryptocurrency broker in London.