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It was last down 7 percent at $14,499 but fell as much as 14.7 percent earlier in the Asian day.
The cryptocurrency, which was at about $1,000 at the year's start, had surged to a record high of $19,666 on Sunday in the lead up to exchange giant CME Group's launch of its bitcoin futures. It has since lost about a third of its value.
Bitcoin's success brought cryptocurrencies to the forefront and has also boosted the profile of its rivals, which offer alternatives to bitcoin.
"A lot of the capital is flowing from bitcoin into alternative coins.
You've seen companies like Verge and Ripple, which are over 400 percent in the last week," Chanel at ASR Wealth Advisers said.
Stephen Innes, head of trading in Asia-Pacific for retail FX broker Oanda in Singapore, said that there have also been moves out of bitcoin into Bitcoin Cash, a clone of the original cryptocurrency. Oanda does not handle trading in bitcoin.
"Most of it is unsophisticated retail traders getting burned badly," Innes said on bitcoin's recent retreat.
Bitcoin is known to go through wild swings. In November, it tumbled almost 30 percent in four days from $7,888 to $5,555. In September, it fell 40 percent from $4,979 to $2,972.
"Unlike equities and bonds, it is not possible to calculate expected returns on bitcoin, so buying it becomes a gamble rather than an investment."
While CME and its rival Cboe Global Markets move to list bitcoin futures has given the digital currency some perceived legitimacy, some policymakers remain skeptical.