NEWYORK: The great cryptocurrency crash of 2018 is heading for its worst week yet.

Bitcoin sank toward $4,000 and most of its peers tumbled on Friday, extending the Bloomberg Galaxy Crypto Index’s decline since Nov 16 to 23 per cent. That’s the worst weekly slump since crypto-mania peaked in early January.

After an epic rally last year that exceeded many of history’s most notorious bubbles, cryptocurrencies have become mired in a nearly $700 billion rout that shows few signs of abating. Many of the concerns that sparked the 2018 retreat –– including increased regulatory scrutiny, community infighting and exchange snafus –– have only intensified this week. Even after losses exceeding 70pc for most virtual currencies, Oanda Corp.’s Stephen Innes has yet to see strong evidence of a capitulation that would signal a market bottom.

“There’s still a lot of people in this game,” Innes, head of trading for Asia Pacific at Oanda, said by phone from Singapore. If Bitcoin “collapses, if we start to see a run down toward $3,000, this thing is going to be a monster. People will be running for the exits.”

Innes said his base-case forecast is for Bitcoin to trade between $3,500 and $6,500 in the short term, with the potential to fall to $2,500 by January.

The largest cryptocurrency retreated as much as 7.6pc on Friday, before paring losses to 3.2pc at 6:36 am in New York, according to Bloomberg composite pricing. At $4,285, Bitcoin is nearing its lowest closing level since October 2017.

Rivals Ether, XRP and Litecoin all declined at least 4pc. The market value of all cryptocurrencies tracked by CoinMarketCap.com has sunk to $140bn, down from about $835bn at the market peak in January.

The rout’s biggest casualties: individual investors who piled in just as prices peaked, and companies like Nvidia Corp that supplied the crypto ecosystem.

Bloomberg/The Washington Post Service

Published in Dawn, November 24th, 2018