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* Bitcoin briefly drops 10% to $ 48,575; drops of ether 14%
* The withdrawal follows record peaks over the weekend (updates prices, adds quotes and background information)
SINGAPORE, Feb.23 (Reuters) – Bitcoin fell below $ 50,000 on Tuesday as investors started to get a little nervous about the digital currency’s high valuation and some player-driven profits.
The cryptocurrency fell more than 10%, its biggest daily drop in a month, to $ 48,575. This extends a sharp pullback of more than 16% from a record high on Sunday, although bitcoin remains up around 75% for the year.
The decline came despite the broad weakness of the US dollar.
“The market has rebounded almost unimpeded since the start of the month and to some extent since the start of the year,” said James Quinn, managing director of digital asset platform Q9 Capital in Hong Kong.
“Seeing sales at all is perfectly healthy and normal,” he said, while adding that some $ 1.5 billion of liquidated leveraged positions on the Binance cryptocurrency exchange was important and that retail investors could sell.
The cryptocurrency market has been very hot this year as the big fund managers start to take the asset class seriously and make some big buys that have driven even more confidence among smaller speculators.
A $ 1.5 billion investment in cryptocurrency by power maker Tesla this month helped raise bitcoin above $ 50,000, but can now put pressure on the stock price of society because it has become sensitive to bitcoin movements.
U.S. Treasury Secretary Janet Yellen, who signaled the need for more tightly regulated cryptocurrencies, also said on Monday that bitcoin was extremely inefficient at conducting transactions and was a highly speculative asset.
Ether, a coin linked to the Ethereum blockchain, which often moves in tandem with bitcoin, also fell more than 10% and last bought $ 1,613, down about 20% from the peak of recording from last week. Bitcoin bought $ 49,846 at 0605 GMT.
“They had a spectacular run and the abrupt reversal of the night is really not unexpected,” said Michael McCarthy, chief strategist at CMC Markets brokerage in Sydney.
“But because we’re so lacking in fundamentals, it’s the big numbers that turned out to be support and resistance points – so $ 50,000, $ 40,000 and $ 30,000 are the key chart levels at this time – there. If we see it go up to $ 50,000, the sale might pick up. ” (Reporting by Tom Westbrook; Editing by Jacqueline Wong)
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