New York (CNN Business) Bitcoin prices surged to a new all-time high of nearly $42,000 on Friday, only to plunge all the way back to about $31,000 Monday morning. That’s a more than 20% drop – which means bitcoin is now in a bear market, as bizarre as it sounds.
Bitcoin is still up a lot over the past few months, not to mention from where it was trading just a few weeks ago. But the drop highlights how the stunning rise has raised alarm bells among some on Wall Street.
“It’s scary when the price of bitcoin just goes straight up,” said James Putra, vice president of product strategy for TradeStation Crypto. “This pullback was needed.”
Just last week a strategist at Bank of America said bitcoin’s surge may be the " mother of all bubbles ," noting that the recent spike is larger than other notorious manias of the past few decades: gold in the 70s, dot-coms/tech in the late 1990s and housing in the mid-2000s.
So the drop of the past few days is a “healthy correction” that “was due a long time ago,” according to Naeem Aslam, chief market analyst at AvaTrade.