Bitcoin has come all the way back from Thursday’s steep slide. The cryptocurrency tumbled as much as 18.5% to $2,076 a coin after the scaing debate came back into focus and riskier assets fell following the Fed rate hike. On Friday, its trading up 3.5% at $2,520.
The selling began when bitcoin-mining firm Bitmain outlined its “contingency plan.” Coindesk explained it best: “Most notably, the proposal would dedicate mining resources to hard forking the network to a rule set with a larger block size — an upgrade that would likely result in two bitcoin networks and two tradable bitcoin assets.”
Riskier assets were already feeling some heat after the Federal Reserve raised its benchamrk interest rate 25 basis points to a range of 1% to 1.25% on Wednesday.
The writing had been on the wall. Bitcoin gained about 180% from the beginning of April through the middle of June. That run prompted tech billionaire Mark Cuban to call bitcoin a “bubble.”
Additionally, Goldman Sachs head of technical strategy Sheba Jafari also sounded the alarm on bitcoin in a note to clients sent earlier this week, saying that “the balance of signals are looking broadly heavy.”
At least for now, it appears that Jafari nailed her call. “Consider re-establishing bullish exposure between 2,330 and no lower than 1,915,” she concluded in this week’s note.