Bitcoin’s slide towards US$30 000 amid China’s continued cryptocurrency crackdown is stoking fears of a deeper sell-off.

Bitcoin fell as much as 4.3% and was trading at about $32 240 as of 9.08am in Hong Kong. Second-ranked ether slipped 4.2% at one point. The sector is under pressure after the People’s Bank of China said on Monday that it had summoned officials from its biggest banks as well as Alipay to a meeting to reiterate a ban on cryptocurrency services.

A conclusive break below $30 000 would mean a “massive hit” to sentiment and possibly “heavy selling activity” across the cryptocurrency market, Pankaj Balani, CEO of digital asset derivatives exchange Delta Exchange, wrote in an e-mail. But he expects the coin to rebound and challenge $40 000 in coming weeks.

Bitcoin has been assailed recently by China’s cryptocurrency clampdown and concerns about the environmental impact of the energy-hungry computers that underpin it. The retreat has dented the argument put forward by advocates like Michael Saylor of MicroStrategy that bitcoin is a dependable store of value.

Stalling

MicroStrategy said on Monday it had purchased an additional 13 005 bitcoins for about $489-million in cash at an average price of about $37 617. The news did little to bolster the virtual currency amid concerns that wider institutional adoption is stalling after Elon Musk and Tesla cooled on bitcoin.

The digital coin has roughly halved from a record of $65 000 in mid-April, though over the past year it’s still up over 200%. Bitcoin’s price is now in the lower part of a range that’s held since a May rout, Chris Weston, head of research with Pepperstone Financial, wrote in a note. “It’s make or break time for crypto,” Weston said. — Reported by Eric Lam, (c) 2021 Bloomberg LP