Bitcoin fell 8% to $ 29,674.25, according to Coin Metrics. Traders had warned that a breakout below $ 30,000 could result in more losses.
Technical analysts had observed the $ 30,000 level as a key support level on the charts after the cryptocurrency fell near this low during its May crash. Analysts, who study the charts to make buy and sell decisions, believe the next level to watch for support could now be as low as $ 20,000.
Now that it is approaching $ 29,000, the price of bitcoin threatens to turn negative for the year.
Galaxy Digital CEO Mike Novogratz told CNBC’s “Squawk Box” that bitcoin could still rebound after Tuesday’s move, but there was a significant downside to the next level of support.
“$ 30,000, we’ll see if it holds up.” We could dive below for a while and close above. If it’s really broken, $ 25,000 is the next big level of support, ”Novogratz said. “Look, I’m less happy than at $ 60,000 but I’m not nervous. “
The prices of bitcoin and other cryptocurrencies have been beaten in recent weeks by a flood of headlines from China, where regulators have imposed new restrictions on energy-intensive mining and reiterated the rules. financial companies relating to the provision of cryptographic services.
Environmental concerns have also become a new flashpoint for the asset class, with Tesla CEO Elon Musk suspending the use of bitcoin as a form of payment for vehicles and saying the hiatus will remain in effect until. that miners use more clean energy.
With Tuesday’s losses, bitcoin slipped about 54% from its all-time high of over $ 64,000 in mid-April.
Other cryptocurrencies were also under pressure, with ether dropping 8% and dogecoin by more than 16%.
Significant pullbacks have already occurred in the cryptocurrency market, with bitcoin falling about 80% from its highs in late 2017 at one point. Professional crypto investors have warned that the space is expected to continue to be volatile for years to come.
Bitcoin and other cryptocurrencies have gained increased institutional support over the past two years, with major hedge fund managers and banks getting involved in the space.
The price of bitcoin rose almost 500% between mid-September last year and its peak in April. Even with the recent dip, the cryptocurrency is still up around 150% over the past 12 months.