The price of bitcoin has crashed once again following a spectacular rise that saw the cryptocurrency's value reach record highs for 2019 in recent days.

Bitcoin fell by nearly $1,000 (£785) in less than an hour on Friday, taking it back down to the $7,000 level it shot past earlier this week.

The latest fall is still way above the $4,000 price point it was trading at one week ago, but remains a long way off its peak of nearly $20,000 that it hit in late 2017.

Cryptocurrency market analysts suggested the dramatic drop could have been triggered by a major holder of bitcoin selling a large amount of the virtual currency on an exchange.

"Bitcoin's blip appears to have been caused by a significant sell order placed on the Bitstamp exchange early this morning, which triggered selling across other exchanges," Simon Peters, an analyst at the online investing platform eToro, told The Independent.

"Given the positive sentiment in the market over the past few weeks, it's likely that the price will recover soon. However, this drop is a stark reminder that cryptoassets still operate in a nascent market, which is susceptible to significant price moves by whales (large holders of cryptocurrency)."

Bitcoin's volatile history in pictures Show all 8 1 /8 Bitcoin's volatile history in pictures Bitcoin's volatile history in pictures Satoshi Nakamoto creates the first bitcoin block in 2009 On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System' Reuters Bitcoin's volatile history in pictures Bitcoin is used as a currency for the first time On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today's prices Lazlo Hanyecz Bitcoin's volatile history in pictures Silk Road opens for business Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin Bitcoin's volatile history in pictures The first bitcoin ATM appears On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash REUTERS/Dimitris Michalakis Bitcoin's volatile history in pictures The fall of MtGox The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed Getty Images Bitcoin's volatile history in pictures Would the real Satoshi Nakamoto please stand up In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim Getty Images Bitcoin's volatile history in pictures Bitcoin's big split On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash REUTERS Bitcoin's volatile history in pictures Bitcoin's price sky rockets Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year Reuters

Other analysts said the price volatility is likely to continue in the coming days and weeks as short-term traders seek to capitalise on the wildly fluctuating prices.

Despite the market chaos, however, the recent gains should still be seen as a major positive for the overall cryptocurrency ecosystem, with some experts citing recent positive news for bitcoin as the reason behind the price rise.

This includes major retailers like Whole Foods opening up their digital tills to bitcoin and other cryptocurrency payments.

"Bitcoin has awakened from the winter freeze of 2018 this week, once again gaining international attention as it reached $8,000 - a staggering 55 per cent increase in the last month alone, before shedding 10 per cent on Friday," said Christel Quek, chief commercial officer of UK-based cryptocurrency firm Bolt.