Other market-watchers agree. “The major price support stands at the $30K level, and a slide below this handle could run into stops and accelerate the sell-off in the short run,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Jeffrey Halley, a senior market analyst at Oanda, says that a break below $30,000 could lead to “another capitulation.” Evercore ISI’s Rich Ross sees a test of support around $29,000.
Bitcoin is still up about 12% this year but the token has plunged from a peak of almost $65,000 in mid-April, casting a pall over the cryptocurrency sector. The recent selloff was exacerbated by billionaire Elon Musk’s public rebuke of the amount of energy used by the servers underpinning the token. Harsh Chinese regulatory oversight also soured the mood.
“You had this phenomenon where Bitcoin got extended, but nothing goes up in a straight line,” said Dan Russo, portfolio manager at Potomac Fund Management. “That’s something to be expected—you’ve seen throughout its short history these bouts of deep drawdowns. It just got extended to the upside and started to roll over.”
The virtual currency—which has more than tripled over the past year—is now in a “cooling off period” that could last “a few months” longer, said Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno Pte.
—With assistance from Anchalee Worrachate, Claire Ballentine, Kenneth Sexton and Joanna Ossinger.
This article was provided by Bloomberg News.