(Bloomberg) Bitcoin fell to its lowest level in over a month and other digital assets also plummeted as investors' tendency towards risk aversion, combined with the lack of a clear catalyst for buying, drove the market down.
The largest cryptocurrency fell to $38,580 by 4.2% on Monday, while ether, the second largest digital currency, fell 5.3% to $2,885. Both crypto assets recovered some of the lost ground during the morning in New York. The value of the global crypto market fell by around 4% over the past 24 hours to US$1.9 trillion, according to CoinGecko's valuations. Altcoins were among the fastest falling cryptocurrencies, while bitcoin cash, EOS and ethereum classic were down more than 6% at one point. Shiba inu also fell, giving up some gains after rising last week after listing in Robinhood.
“We have seen weakness in cryptocurrencies, largely in line with the liquidation of shares and other risky assets,” said Joshua Lim, head of derivatives at Genesis Global Trading. Investors in the traditional finance world continue to be risk-averse, while crypto-centric holders expect any sign of new interest from recent major bitcoin buyers, such as MicroStrategy Inc. and Luna Foundation Guard, which has been building a bitcoin position in support of the Terra blockchain and its stable cryptocurrency.
Technical charts suggest that, despite the recent fall in bitcoin, it is “nowhere near an oversold reading,” and short-term support of $35,000 will probably not hold, John Roque, technical analyst at 22V Research, said Sunday in a note. “We continue to believe that it will reach the level of $30,000,” he said.
Bitcoin has been facing difficulties in recent months, as have other risky assets, trading largely in the range of $35,000 to $45,000 this year, as the Federal Reserve began raising interest rates amid stubbornly high inflation. Trading volumes have also declined, including on Coinbase, Bitfinex, Kraken, Bitstamp, and other exchanges. An aggregate measure shows that volumes are lower by approximately 60% compared to the levels observed last May. Meanwhile, Google searches for the word “bitcoin” have also declined, and social media activity through the Crypto Subreddit, measured by things like comments and posts per day, has dropped from mid-2021 levels.
However, many bitcoin bulls remain undisturbed and predictions of $100,000 and even more are still heard. But the price targets of $500,000 and $1 million in circulation mean that “it's hard for us to imagine that perception remains anything but constructive,” Roque said.
Original Note:
Bitcoin Falls to Lowest in a Month as Risk Aversion Takes Toll
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