Bitcoin extended its five-day losing streak on Thursday and dropped below US$8 000 for the first time since June as a growing list of concerns weighed on crypto assets.
Bitcoin fell as much as 9% to trade at $7 736 in New York, according to Bloomberg composite pricing. The Bloomberg Galaxy Crypto Index that tracks a basket of cryptocurrencies slumped more than 8% as peer coins, including ether and XRP, also sold-off. That’s the lowest level since May for the index.
There is “no good catalyst to drive it higher”, said John Spallanzani, portfolio manager at Miller Value Partners. Bitcoin was never able to regain the near-$14 000 highs it reached over the summer, he said, adding that the “market got tired and volume dried up”.
Investors cited a variety of reasons for the slump that’s seen bitcoin lose close to 22% of its value since Friday. Some pointed to a lacklustre reception to the first bitcoin futures contracts that were offered by the Intercontinental Exchange’s Bakkt platform. Others pointed to the US Securities and Exchange Commission delaying a decision on a bitcoin exchange-traded product. Still others said the expiration of CME futures contracts set to take place this week is causing turbulence.
Here is what market watchers are saying:
- “As the volumes on these contracts have been particularly high this week, this month’s close could be particularly volatile,” Mati Greenspan, senior market analyst at trading platform eToro, wrote in a note in reference to the CME contracts.
- “A bitcoin ETF isn’t likely to arrive on US exchanges in 2019,” James Seyffart, a Bloomberg Intelligence analyst, wrote in a note. “The SEC has made clear that it’s concerned about bitcoin price manipulation on exchanges without any regulatory oversight or surveillance.”
200-day moving average
Falling below the $8 000 level could mean bitcoin would test its 200-day moving average support, which sits around $7 000.
Falling below the $8 000 level could mean bitcoin would test its 200-day moving average support, which sits around $7 000. And according to the Trading Envelope Indicator, a technical tool that smooths moving averages to map out higher and lower limits, the coin has fallen below its lower band.
Following a break below $8 000, “a quick move back to $6 000 would not be out of the question,” said Spallanzani. — Reported by Vildana Hajric, (c) 2019 Bloomberg LP