Bitcoin’s price fell for the seventh time in eight days, sparking fears that the decline might push the largest cryptocurrency out of the trading range it has occupied for much of the year. The broad risk aversion that has swept across global markets as central banks combat inflation while seeking to moderate the stimulus supplied during the Covid epidemic has pushed down cryptocurrency prices. This year, Bitcoin has lost more than 20% of its value.
“The chicken bones on the technical charts show Bitcoin might be on its way to $28,000 and then $20,000 if risk sentiment continues to fall,” Jeffrey Halley, a senior market analyst at Oanda Asia Pacific, wrote in an email. “HODL on for dear life.”
As of 5 p.m. Eastern time on Friday, Bitcoin was down around 1% to $36,077. It fell to its lowest point since February, closing down 6.3 percent since last Friday. The digital asset has fluctuated between $33,000 and $48,000 since the beginning of the year. It was last under $32,000 in July. This week, Ether, Avalanche, and Solana all decreased.
According to Coinglass statistics, around $475 million in long Bitcoin holdings were liquidated in only 24 hours. On Thursday, bitcoin dropped roughly 8%, the most in a single day since January.
“Bitcoin is down about 10%, breaching its support price, and there is a risk it may fall below the present level,” Edul Patel, CEO and co-founder of Mudrex, an algorithmic-based crypto investing platform, stated. “BTC currently has a support level of $32,000.”
Both bitcoin and the tech-heavy Nasdaq 100 hit all-time highs in November and have been on a turbulent downward trend since. The Nasdaq 100 has dropped for the sixth week in a row.
The 90-day correlation coefficient between Bitcoin and the tech index is currently at 0.67, the highest level since Bloomberg began tracking this data in 2010. A coefficient of one indicates that the assets are moving in lockstep, whereas a coefficient of negative one indicates that they are going in opposing directions.
More hawkish central-bank policies, as well as uncertainty about the course of global economies, are among the challenges confronting crypto — and other markets — this year, according to David Duong, head of institutional research at Coinbase Global Inc.
Duong said one major message from the Milken Institute conference this week was that many people believed that, despite the market upheaval so far this year, “there is still a good chance for further downside correction across risk assets.”