News of another big cryptocurrency exchange hack caused further volatility on digital currency exchanges on Monday.
Japanese trading platform Coincheck was compromised over the weekend, with hackers netting more than $530m worth of the virtual currency NEM.
On Monday, Coincheck was still looking into compensating its customers, having halted client withdrawals over the weekend.
"Sentiment towards cryptocurrencies is turning increasingly bearish amid regulation fears, with recent news of a massive exchange in Japan halting client withdrawals further souring investor appetite," said Lukman Otunuga at FXTM.
Armed bitcoin robbery
A separate incident was being reported on Monday morning that a British cryptocurrency trader had been forced at gunpoint to make a bitcoin transfer.
Four armed men broke into the Oxfordshire home of a bitcoin trader and his partner, threatening the man at gunpoint to transfer his holdings of the digital currency.
Police were yet to make it clear whether the incident was an attack targeted at the trader's holdings of bitcoin, or whether it was a speculative raid.
Nevertheless, the anonymity issues surrounding cryptocurrency trade are likely to be raised again by regulators who fear a rise in criminal acts involving digital exchanges.
The lack of transparency in bitcoin trade was raised at Davos last week and concerns over enforced governmental regulations caused some turbulent trading conditions last week.
"Unified threats articulated by a chorus of financial heavyweights on cryptocurrency regulations during the Davos conference, have exposed Bitcoin to significant downside risks," said Otunuga.
In recent trading sessions the downside risks have been limited. Bitcoin, specifically, has found support close to the $10,000 level and demand remains reasonably robust until selling is seen again around the $12,000 level - a resistance level that bitcoin has struggled to break free from this month.
"There seems to be a painful struggle for prices to keep above the psychological $10,000 support level," said Otunuga.
"A break below $10,000 may invite a further decline back toward $9000, $8400 and $8000, respectively. Alternatively, bulls need to push prices back above $11,900 to jump back into the game."
NEM, the cryptocurrency stolen in the Japanese hack was down 10.91% at $0.932 in early trade on the Bitstamp exchange.
- Bitcoin fell 5.56% to $11,340
- Ethereum was down 0.7% at $1,183.60
- Ripple eased 0.92% lower to $1.288
- Litecoin lost 3.18 to $177.83