Bitcoin nosedives 15% a day after breaching $34,000

Bitcoin prices crashed 15 percent on January 4, a day after blasting the $34,000-mark for the first time. The world's largest cryptocurrency breached its immediate resistance of $30,000 on Sunday, a level it had been struggling with for the past few sessions, and skyrocketed $3,000 in about seven hours. However, the cryptocurrency plummeted sharply on Monday, falling below the $30,000 mark.

At the time of writing this copy, bitcoin was trading down 12.9 percent at $29,328.64. It touched a 24-hour high of $34,347.9 and a 24-hour low of $28,154.11. The premier cryptocurrency has surged 6.82 percent in the new year, which is in its fourth day.

The stellar start is on the back of a landmark year in which bitcoin rose more than 300 percent, gaining almost 50 percent in December alone.

After the digital currency zoomed past $30,000, well-known macro strategist Jim Bianco tweeted, "Bitcoin makes TSLA look like it is standing still."

*BITCOIN EXTENDS RALLY TO TOP $30,000 FOR THE FIRST TIME

Bitcoin first passed $20,000 on December 16, and $25,000 on December 26. Now over $31,000
50+% gain in less than 16 days!

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Bitcoin makes TSLA look like it is standing still. pic.twitter.com/5XUSv9jv00

— Jim Bianco (@biancoresearch) January 2, 2021

Former Merrill Lynch economist and long-time bear, David Rosenberg said the sharp rally had pushed the cryptocurrency to the "bubble" zone.

In an interview with CNBC, Rosenberg said, "The parabolic move in bitcoin in such a short time period, I would say for any security, is highly abnormal."

According to him, gold offered better value at the current juncture. "It has 1/5 of the volatility that bitcoin does," Rosenberg said. "I’ve been very bullish on gold, and I remain bullish on gold."

Gold prices in India rose more than 1 percent on January 4.

On the Multi-Commodity Exchange (MCX), February gold contracts were trading higher by 1.05 percent at Rs 50,771 per 10 gram at 0920 hours. March silver was trading 2.2 percent higher at Rs 69,650 a kilogram.