Cryptocurrency news: In a broad pullback from recent record highs, cryptocurrency price slumped on Tuesday, with Bitcoin momentarily falling below $60,000 and Ether at its lowest level this month. Traders were caught off guard as the most significant digital token dropped by as much as 8.2 percent before nearly halving its loss. Since September 24, the loss to $58,661 has been the largest in a single trading day since then. In second place, Ether fell by almost 10% before recouping its losses. Tracker CoinGecko reports a 10% reduction in the global crypto market valuation to $2.7 trillion over the last 24 hours.
“We are seeing a huge reversal after several days of gains,” said Walid Koudmani, an analyst at XTB Market, who witnessed Bitcoin hover near its all-time high as many other altcoins managed to hit new highs. More bad news might trigger a domino effect, sending prices plummeting even lower in the face of the market’s high volatility.
Shares of Coinbase Global Inc., a crypto exchange, fell by about 4% at one point, one of the worst-hit equities. Additionally, the stock prices of MicroStrategy Inc., Marathon Digital Holdings Inc., and Riot Blockchain Inc. fell.
There had been some indications from the market’s technical indicators that the recent good run was about to end.
On Monday, the $550 billion infrastructure plan signed into law by President Joe Biden includes new tax reporting requirements for digital currencies, which some analysts believe contributed to the decline.
According to Hayden Hughes, CEO of social trading platform Alpha Impact, “We’ve seen the U.S. infrastructure bill gets passed, which has sparked a selloff among traders who are concerned about regulation and taxation.”
As a result, bitcoin “brokers,” such as Coinbase, are subject to stricter reporting requirements under a new regulation. Those companies are now required to provide the IRS with information on their customers, including their name, address, phone number; the gross revenues from sales; and any financial gains or losses.
According to Hughes, China’s regulatory crackdown is only going to become worse. Meng Wei, a spokesperson for China’s National Development and Reform Commission, said at a news conference that the country would look into the possibility of charging cryptocurrency mining companies punitive electricity charges.
According to Fiona Cincotta, senior financial markets analyst at City Index, “Bitcoin is always going to be so volatile toward” attempts to regulate and control it. Just a little bit of a deterrent.
According to a recent interview with Dow Jones, Twitter Inc.’s CFO stated that the company’s capital should not be invested in cryptocurrencies such as Bitcoin. Jack Dorsey, Twitter’s co-founder, and CEO is one of the most prominent supporters of cryptocurrency.
Bitcoin’s value has increased by over 200% this year, while Ether’s value has increased by more than 600%. Speculative demand for digital assets, as well as the sometimes-controversial claim that they can help protect against inflation, drove both to record highs last week.
Bitcoin options skew had gone negative, and volatility was on the decline. According to Genesis Global Trading’s Noelle Acheson, head of market analytics, this appears to be just a correction from the optimistic mood that had been building in the market.
Many Bitcoin chartists are looking for technical clues to determine where the digital currency can go next in terms of price. To stabilize the market, it reached its 50-day moving average.
Matt Maley, the chief market analyst for Miller Tabak & Co., warned in a note that if Bitcoin slips significantly below its late-October lows of around $59,000, it will be vulnerable to further fall. This month’s lows in July were below its downward trend line; but, if it falls below $50,000 before then, it will be below that line. That means, he explained that a short-term downturn would not affect the technology.
Maley stated, “Bitcoin is getting hammered.” The strong run it’s had over the last six weeks makes me think it’s just some profit-taking.
In New York, the price of one bitcoin fell by 5.4% to $60,450 at 2:32 p.m.