Cryptocurrency markets are swung wildly on Friday, after a major early morning crash gave way to an afternoon rebound.
During European morning trade on Friday, the price of virtually every major cryptocurrency dropped more than 15% as investors remained spooked following bitcoin's fall below the key $9,000 support level on Thursday.
"The wheels are coming off the bitcoin bandwagon," Neil Wilson, a senior market analyst with ETX Capital, said in an email this morning.
"The regulatory crunch appears closer than ever and sooner or later this market could be headed back down to earth. Selling pressure at the moment is intense as there has been nothing but bad news for bitcoin bulls of late."
Bitcoin crashed as low as $7,700 during the collapse, losing roughly 15% of its value at one point. Other major cryptos fell even further, with Ethereum down as much as 23% at one point.
By the European afternoon, however, prices have bounced back sharply, and by 4.50 p.m. GMT (11.45 a.m. ET) bitcoin was actually in positive territory on the day, trading at $9,130.
Although there was no immediately obvious catalyst for the rebound, it coincided with the East Coast of the USA waking up, suggesting that American traders were engaging in a bout of dip-buying.
Market capitalisation is an inexact measure of cryptocurrencies (as Business Insider Australia's Sam Jacobs has outlined), but it at least gives a good idea of the scale of the ongoing sell-off.
The crypto market has been on the back foot since the start of the year, hit by fears of a regulatory crackdown and slipping Asian volumes. Bitcoin is now at less than half its December peak of over $19,000.
More concerns have emerged about the sector this week as Facebook banned cryptocurrency advertisements and US regulators began investigating tether, a cryptocurrency that some fear has been used to inflate the value of bitcoin.
India's finance minister also said this week that the Indian government "does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system."
