funp Bitcoin’s steady fall nears worst bear markets NOT OVER YET: Analysts said the sell-off is likely not over yet, and institutional money is needed for the next push as the US$3,000 ‘line in the sand’ approaches Bloomberg
Bitcoin fell below US$4,000 and extended its crash this year to within striking distance of the biggest cryptocurrency’s worst bear markets.
The virtual currency conceived just more than a decade ago on Monday slid as much as 17 percent to US$3,523, bringing its decline from its record high of almost US$20,000 in December last year to about 80 percent.
All nine of its largest peers tracked in real time by Bloomberg fell, with drops ranging as high as 21 percent for Monero.
The collapse, which has ensnared rival coins like Ether and XRP, is entering the same league as bitcoin’s 93 percent plunge in 2011 from its previous record high, and its 84 percent rout from 2013 to 2015, during the collapse of Tokyo-based crypto exchange Mt.
Gox.
In US dollar terms, the damage has been even bigger this time around: Virtual currencies tracked by CoinMarketCap.com have lost more than US$700 billion of value since the market peaked in January.
“There’s an element of almost shock: There’s nothing to suggest the sell-off is over,” said Craig Erlam, senior market analyst at securities firm Oanda Corp in London.
“This was a market primarily driven by sentiment since last year, and it’s since been completely destroyed.”
While bulls are betting that demand from institutional investors would stabilize prices, most big money managers have stayed on the sidelines amid concerns over exchange security, market manipulation and regulatory risk.
The sell-off is “really testing the faith of a few key players,” said Ryan Rabaglia, Hong Kong-based head trader at OSL, a cryptocurrency dealing firm. “For this next push, we are going to need that institutional money to come in finally. To lend that support and help with growth.”
Erlam is among strategists who say trader confidence was shattered after bitcoin crashed through US$6,000 earlier this month.
The level had seemed to be a genuine support for the token all year and likely to have encouraged traders to put stop loss orders just below it.
Other technical measures suggest more pain to come. The DVAN Buying/Selling Pressure Gauge is the most oversold and showing the strongest negative divergence since the May sell-off.
In addition, the price of bitcoin is still far below the trend line indicating the selling pressure is to widen further, which could indicate further losses to come.
“When US$6,000 broke, you had an element of stops being taken out, but there are more factors at play,” Erlam said. “There are investigations, the hard fork of Bitcoin Cash knocked people’s confidence, volatility is back and institutional money hasn’t really flowed in.
The next line in the sand looks like US$3,000.” This story has been viewed 742 times. Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned..