Bitcoin tumbles 5% to below $47,000 as it heads toward its worst monthly slump since May

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Bitcoin struggled for a third straight session Wednesday, losing 5% to trade below $47,000
The digital currency appears to be facing a headwind from this week's expiration of options contracts worth about $6 billion.
Bitcoin has lost 17% in December, its worst monthly performance since May.
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Bitcoin fell for a third straight session Wednesday and is heading toward its worst monthly performance in seven months, as investors wrap up trading for 2021.

The world's most valuable cryptocurrency was down 5.4% at $46,647.85 during Wednesday's session from Tuesday when it traded as high as $49,307.04, according to Coingecko.

Bitcoin has failed to hold $52,000 following a "short-term breakthrough" on Monday, said Adrian Kenny, senior sales trader at digital asset broker GlobalBlock, in a note Wednesday.

"Whilst Bitcoin's overall trading volumes were consistent, a total of 129,800 option contracts are set to expire on the 31st December which is believed to be fuelling overall wary sentiment for the short term," Kenny wrote, noting the value of the options is about $6 billion.

Bitcoin's failure to stay above $50,000 is worrisome for many crypto traders, said Naeem Aslam, chief market analyst at AvaTrade, in a note early Wednesday. "If the price continues to trade below this mark, we are likely to visit the early 40K price level again."

Bitcoin is on track to lose roughly 17% for December, which would be its sharpest monthly decline since May when bitcoin sank about 35%.

May's decline was driven largely by worries about regulatory moves in China and in the US. Bitcoin also came under pressure after electric vehicle maker Tesla said in mid-May it would halt taking bitcoin as a payment option because of environmental concerns.

This month started off with a weekend selloff in bitcoin and the wider cryptocurrency market, with one day of trading throwing bitcoin's price down by as much as 27%. But while bitcoin is under pressure for December, it's still on course to rise about 63% in 2021.

Peter Schiff, president of Euro Pacific Capital and a bitcoin skeptic, pointed out in a tweet Tuesday that bitcoin's market dominance had dropped this month.

"With over 16,000 alternative cryptos to choose from Bitcoin's market dominance is now below 40% for the first time since June of 2018. With an unlimited supply of easily created cryptos with virtually identical properties, #Bitcoin is losing its first-mover competitive advantage," he wrote.

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