Bitcoin briefly loses $10,000 in nervous mark

The bitcoin dropped sharply overnight, losing $10,000 in value in a nervous market before recouping some of its losses Saturday morning.

At one point late Friday, the often volatile cryptocurrency took a sudden sharp drop to $42,296, losing nearly 20 percent of its value.

But by 1600 GMT Saturday, the virtual currency had regained some ground, trading at $48,210, down 10 percent from Friday.

The leading Wall Street indicators all ended in the red Friday amid weakness in tech shares and fears about the new Omicron variant of Covid-19.

“Digital assets got pushed around by the broader risk of conditions related to Omicron and expectations of a more aggressive Fed, but didn’t properly sell-off until Friday, on contagion from equities,” said Martha Reyes, research director at the Bequant digital asset brokerage and exchange.

Reyes said the decline in the value of bitcoin, often prone to violent swings, was not entirely surprising. Since late November, she said in a note, it had been “stuck in a narrow range” while some investors wanted to unwind their positions.

Anto Paroian, the chief operating officer at crypto hedge fund ARK36.com, said current price levels “aren’t unexpected,” just weeks after the currency set a record of $68,363 before falling and repeatedly failing to again pass the $60,000 mark.

“During previous Bitcoin bull markets violent swings of 20-30% happened a few times before the market topped,” he said in a note.