Major cryptocurrencies slumped on Friday with bitcoin, ether and dogecoin falling up to 10% amid continued consolidation and low volatility, as bulls and bears continued to fight for domination over the crypto market.
The crypto market mirrored the weak trend in the traditional markets, where major global equity indices traded in the red on concerns over the US growth outlook amid fears of the rise in covid-19 cases due to the delta variant.
While bitcoin’s correlation with S&P 500 hit a three-year low in June, as per the Kraken Intelligence report, experts say that institutional adoption of cryptocurrencies over the past year has made them susceptible to changes in the traditional markets.
Over the past two months, bitcoin has been trading between $30,000 and $42,000 levels as sentiment remained muted amid concerns over the environmental impact of bitcoin mining and regulatory crackdown in China.
The world’s biggest cryptocurrency on Thursday again slumped below the crucial support at $33,000 level and is now in danger of falling towards the $30,000 level. The digital asset, which is 50% lower against its all-time high, was trading 6% lower at $32,682 at around 4pm, as per CoinGecko.com.
Trading veteran, Peter Brandt on Wednesday said that bitcoin may soon fall below the $30,000 level.
In a Twitter thread, Brandt, who is the chief executive officer of global trading firm Factor LLC, shared a chart pattern showing bitcoin’s trading range. He also launched a poll asking users how low bitcoin can go below $30,000. However, most respondents were of the view that the digital currency won’t break that level.
However, a major critic of bitcoin, Peter Schiff, who is the CEO of US-based Euro Pacific Capital, tweets that the digital asset may lose over a third of its value from here on.
“Bitcoin continues to carve out the right shoulder of an ominous head and shoulders top pattern. If bitcoin takes out the June low, the market could easily collapse below $10,000, especially if leveraged speculators are forced to sell. No one seems to acknowledge this possibility,” Schiff tweeted. Bitcoin had slumped to $28,000 level last month.
Meanwhile, the world’s second-biggest cryptocurrency, ether, was down over 8% at $2,183 today, while Shiba Inu-based meme crypto dogecoin slumped as much as 10%.
The sentiment in the crypto market further took a hit after shorts on cryptocurrency exchange Bitfinex spiked 160%. “The latest price action came hours after fresh selling pressure thanks in part to an unknown whale trying to short it with over 5,000 bitcoin,” Cointelegraph reported.
In the bearish cues from global regulators, The European Union is expected to propose a new agency to crack down on money laundering and transparency rules crypto assets, while China’s central bank highlighted concerns over risks to financial systems from stablecoins.
A stablecoin is a digital currency that is linked to an underlying asset such as a national currency such as the US dollar or a precious metal such as gold.
Last week, Fitch Rating Ltd had said that the rapid growth of stablecoin issuance could have implications for the functioning of short-term credit markets.
In another negative news for the crypto market, the Securities and Exchange Commission (SEC) on Wednesday extended its review of SkyBridge Capital’s application for a bitcoin exchange-traded fund.
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