The generous holiday spirit wasn’t enough to keep the bitcoin bubble fully inflated, leaving some traders confused and others invoking the historic ‘I told you so’ rhetoric. Bitcoin was trading at $14,099.01 on Coinbase as of 1:55 p.m. HK/SIN on Monday after plummeting over 30 percent on Friday, the biggest reversal for the cryptocurrency this year. Coinbase, the most popular US bitcoin exchange, briefly halted buying and selling on Friday, citing “high traffic” as the source, while many claimed it was due to the tumultuous selling spree. Bitcoin had fallen as much as 4 percent on the Bitstamp exchange on Monday, to a low of $13,615 before rebounding to over $14,000. Bitcoin hit a high of $19,666 on December 17.
The U.S. dollar, in contrast, enjoyed stability from Monday’s thin holiday trade volume, remaining unchanged against the euro at $1.1857, and heading modestly higher against the yen, to trade at 113.28. The only major exchange operating on Monday was Tokyo, causing trade volume to be less than 20 percent of the average for major currency pairs, according to Thomson Reuters FX Volume Heatmap. Trading volume is expected to remain thin throughout the holiday season, though it is not uncommon for traders to purchase dollars in advance of the year-end.
Data out of the U.S. on Friday showed that consumer spending increased in November but that savings dropped to $426.2 billion, their lowest level in nearly nine years. Bullish data on the labor market and in the housing and manufacturing industries contributed to a strong picture of the U.S. economy, and the government confirmed that the economy grew at a 3.2 percent annualized rate in Q3. Growth predictions for Q4 2017 are as high as 3.3 percent, especially in light of the recent tax reform bill that was passed last week, which President Trump has promised will stimulate the economy.