Bitcoin (BTC) could be at risk of a correction after the coin saw a sharp sell-off in Asian trading on Sunday to lows near $51,000 (£37,00, Є42,000). The coin has bounced to $56,000 (£40,00, Є47,000) but cold feet are starting to appear as the $60,000 (£43,00, Є50,000) level becomes stubborn.
Dogecoin (DOGE) had a sizzling week with the coin gaining more than 400%. The move saw the cryptocurrency hit the number five spot on the list of coins by market capitalisation, but some are wary of the gains in a coin that lacks tangible value and use cases.
Dogecoin rally crashes Robinhood app
Last week’s surge in Dogecoin to an all-time high caused the Robinhood investment app to crash after an influx of trading volumes. In a blog post, the company said: “One of our systems failed, which brought down our crypto order system.”
The system was back up in an hour, but further issues were seen on the Friday morning with DOGE surging to $0.50 on the app. The events are not a great advert for the trading platform after their systems were busted by the GameStop (GME) frenzy earlier this year.
DOGE was up 400% last week alone with the coin’s market capitalisation peaking near $50bn. The valuation is crazy considering the coin has no project development in play, nor is it being used in wide numbers as a currency, but monetary systems are based on trust and the value that holders place on the money.
Some investors are wary of the move with Forbes quoting a spokesperson at UK app Freetrade who said: "People are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up and then they can sell off and make a quick buck.”
The spokesperson added: “But when everyone is doing this, the bubble eventually has to burst and you are going to be left short-changed if you do not get out in time. And it is almost impossible to say when that is going to happen."
BTC rally at risk after Sunday stumble
Bitcoin is at risk of a further correction, which would bring down the value of altcoins after the biggest cryptocurrency failed to hold gains above $60,000 once more.
BTC was hurt by rumours that the US Treasury is planning to charge financial institutions for money laundering with cryptocurrencies. The news adds to speculation of an Indian crypto ban recently, while Turkey also moved to take action with a partial crypto ban in the country. Turkey is seeking to protect its fiat currency, Turkish lira (TRY), which has been under pressure due to inflation in recent months.