Another painful week for Bitcoin could signal more trouble ahead for the world’s largest cryptocurrency, with some analysts calling $ 20,000 as a disadvantage target.
Another bad week for Bitcoin could be a precursor to more pain to come, according to strategists watching the selloff in cryptocurrencies.
A further weakness in its price could bring the $ 20,000 area into view as a negative target, according to Oanda Corp., Evercore ISI and Tallbacken Capital Advisors LLC. Bitcoin fell about 7% this week and traded around $ 34,200 starting at 10:16 am in London.
The largest cryptocurrency is “dangerously close to the $ 30,000 level” amid growing regulatory fears in the United States, and “a $ 30,000 break could see a tremendous amount of impulse sales,” said Edward Moya , senior market analyst with Oanda Corp.
Bitcoin has dropped about $ 30,000 from its April record, exploited by a reprimand from billionaire Elon Musk for the energy it requires and by a renewed regulatory recovery in China. The ability of U.S. authorities to recover a high-profile Bitcoin bailout has also affected the idea that it is beyond government control, which has been an article of faith for some of the currency’s supporters. .
Evercore technical strategist Rich Ross and Michael Purves of Tallbacken Capital Advisors have pushed the $ 20,000 area as a potential key level if Bitcoin breaks much lower than where it is now.
Others, however, remain confident about their long-term prospects.
For example, MicroStrategy Inc. of Michael Saylor increased a sale of junk bonds to $ 500 million from $ 400 million to finance the purchase of more Bitcoin. MicroStrategy is developed as one of the most bullish public companies in cryptocurrencies. In El Salvador, President Nayib Bukele said the nation has adopted Bitcoin as its legal tender.
Yet, about a week after Bitcoin’s all-time high in mid-April, Tallbacken’s Purves had argued that the bullish case seemed “highly challenged”.
“How much lower can it be?” Purves asked in his note Tuesday. “The most obvious answer continues to be a complete retracement of the $ 20,000 crash – in other words, back to $ 20,000.”
Meanwhile, the debate is intensifying over the weight of policing in cryptocurrencies. Hester Peirce, a commissioner for the Securities and Exchange Commission, said she is concerned about a push toward a more active role by regulators in the crypto market, according to a Financial Times interview.
(Market updates in the second paragraph).
–With the help of Joanna Ossinger.