Bitcoin drops below $30,000 as sell-off intensifies, dragging other cryptos down

Bitcoin fell below $30,000 for the first time in four weeks dragging other cryptocurrencies lower.

World’s largest digital coin dropped more than 5.5%, while Ether, the second-largest crypto, fell over 6%, and XRP sank about 9%, according to CoinDesk data. 

About $89 billion got wiped off from the entire cryptocurrency market in 24 hours as of 6:29 am ET on Tuesday, CoinMarketCap data shows.

“There’s been a broad sell-off in global markets, risk assets are down across the board,” Annabelle Huang, partner at cryptocurrency financial services firm Amber Group told CNBC.

The dive in Bitcoin came after the sell-off. On Monday, the Dow Jones Industrial Average performed the worst day since last October.

There are “concerns of the quality and strength of economic recovery” and “broader risk assets turned weaker including high yields,” Huang said. “Coupled with recent BTC (bitcoin) weakness, this just sent crypto market down further.”

In mid-April, Bitcoin rose to an all-time high of nearly $65,000.

Since then, its price has plunged over 50%, followed by an intense crackdown in China on cryptocurrency trading and mining weighing on the price.

China has forced major tech parks to shut down mining operations, citing the use of an enormous amount of energy used generated by non-renewable resources.

People’s Bank of China has also spoken to fintech companies asking them not to offer crypto-related services to customers.

China banned local crypto exchanges in 2017, forcing them to move offshore. However, that did not stop Chinese traders from buying and selling digital coins. But the strict actions this year from Chinese regulators have further tightened restrictions on trading and mining.

“All signals are red as BTC (bitcoin) continues to be weighed down by China’s ultimate crypto ban and worsening macroeconomic conditions from a surge in covid variants,” Jehan Chu, founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital told CNBC.

Regulators around the world are also closely observing at the crypto space.

Last month, UK authorities barred Binance, the world’s largest crypto exchange, from carrying out any regulated activities in the country.

Regulators in Japan, Canada, and Thailand have also issued notices about Binance.

“In general, we’re seeing more regulatory focus on crypto and bitcoin,” Vijay Ayyar, head of business development at cryptocurrency exchange Luno told CNBC.

Ayyar thinks Bitcoin rallying below $30,000 could be significant, as the sell-off could go lower to test the $22,000 to $24,000 level, and from then on, the cryptocurrency could trade in a range.

“I would see bitcoin between 20-40K ($20,000 to $40,000) for a while now before any bullishness returns,” Ayyar said.

Kinetic Capital’s Chu also sees potential selling ahead.

“Q1′s crypto market momentum has stalled and is threatening further reversal potentially below the $25K levels,” Chu said.

Picture Credit: Business Insider