Bitcoin dropped to its lowest level in more than a month and other digital assets tumbled as investors’ tendency toward risk aversion, combined with the lack of a clear catalyst for buying, drove the market lower.
The largest cryptocurrency fell as much as 4.2% to $38,580 on Monday while Ether -- the No. 2 digital asset -- dropped 5.3%, declining to as low as $2,885; both regained some ground in the New York morning. The global crypto market’s value dropped about 4% in the past 24 hours to $1.9 trillion, according to pricing from CoinGecko. Altcoins were among the biggest decliners, with Bitcoin Cash, EOS and Ethereum Classic each decreasing more than 6% at one point. Shiba Inu also fell, giving up some gains after surging last week following its listing with Robinhood.
“We’ve seen weakness in crypto, largely in line with the selloff in equities and other risk assets,” Joshua Lim, head of derivative at Genesis Global Trading, said. Investors from the world of traditional finance continue to be risk-averse, while crypto-centric holders are awaiting any signs of fresh interest from recent significant Bitcoin buyers such as MicroStrategy Inc. and the Luna Foundation Guard, which has been building a Bitcoin position in support of the Terra blockchain and its stablecoin.
Technical charts suggest that despite Bitcoin’s recent drop, it is “not close to an oversold reading,” and near-term support at $35,000 likely won’t hold, said John Roque, technical analyst at 22V Research, in a note Sunday. “We continue to believe that it will get to the $30,000 level,” he said.
“Technical traders have been paying a lot of attention to the support at the $39,500 region for a while,” Teong Hng, chief executive of Hong Kong-based Satori Research, said. “When it broke lower today in thin liquidity, lots of stop-selling ensued.”
