Breaking news: Bitcoin once fell below the $53,000 mark, the biggest drop in a month

Source: Sina Finance

Bitcoin prices gave up all of their weekend gains as analysts questioned whether the cryptocurrency had become overheated.

Bitcoin prices fell as much as 8.2% in European trading to around $53,000 after a surge this month in the world's largest cryptocurrency, spurred by Tesla buying and institutional investors calling bitcoin an attractive alternative to gold and the dollar.

In February alone, bitcoin has risen more than 60 percent, sparking concerns that the rally has gone too far, with prices nearing $59,000 on Sunday, a new all-time high.

It is widely believed that the weekend's big price swings were driven by individuals trading cryptocurrencies from home, so it is possible that the price could fall as institutional traders return to work on Monday in response to Elon Musk's tweet on Saturday that the price of Bitcoin "seems high."

“Basically this is a speculative market that’s collectively long, plus Elon Musk saying it’s a little too high,” said Jeffrey Halley, senior analyst at Oanda Corp.

Meanwhile, JPMorgan Chase & Co. strategists are warning about bitcoin's declining liquidity. Strategist Nikolaos Panigirtzoglou wrote in a Friday note that the digital currency's liquidity is lower than that of the S&P 500 and gold, meaning that "even small trading volumes can have large price impacts."

“It goes without saying that new investors in bitcoin should be prepared for significant volatility, with prices likely to plummet as quickly as they have surged,” said Neil Wilson, chief analyst at Markets.com.