Cryptocurrencies fell sharply on Friday, with a flash selloff dragging bitcoin to a three-week low.
Bitcoin fell 7.7% to $21,404 during European morning trading, recovered slightly, and then continued its downward trajectory to trade around $21,400 by 1138 GMT, down 8.2%.
Ether also fell 8.8% to $1,685 at the same time.
The reason for the fall was unclear.
“It doesn’t show the pattern of a flash crash, as assets didn’t immediately rebound sharply, but plunged further in the hours that followed,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“It seems likely that this was the result of a large sale transaction.”
Streeter said that it seemed that the cryptocurrency cardano had been the first to move, followed by bitcoin and ether, and then others such as the altcoin dogecoin.
Cryptocurrencies have fallen sharply so far this year as Federal Reserve rate hikes and soaring inflation cause investors to dump riskier assets.
Craig Erlam, a senior market analyst at Oanda, said that the fact that Bitcoin has not recovered its losses “suggests that the move has merit.”
These kinds of sharp moves are common in the volatile cryptocurrency market. On June 15, Bitcoin plunged more than 15% as investors spooked over the collapse of one so-called stablecoin, TerraUSD, and a major cryptocurrency lender froze customer withdrawals.
Friday’s move put Bitcoin on track for its worst day since the June crash.
“Speculating in cryptocurrencies is extremely high risk and not suitable for the vast majority of people,” said Streeter of Hargreaves Lansdown.