Bitcoin fell below $30,000 late on Monday for the first time in a month, nearly erasing its entire 2021 gain. Around 9 a.m. it was trading at $29,750, down 3% over the past 24 hours. Ether, the second most valuable cryptocurrency, was also down about 3% to $1,750.
Crypto washed out along with most other assets on Monday, and Bitcoin is trading more like a risky security than like the hedge that some proponents say it is. Oanda analyst
calls Bitcoin the “ultimate risky asset right now,” warning that “it could see intense selling pressure if Wall Street enters into panic-selling mode.”
Bitcoin peaked above $64,000 on the day that
Global (ticker: COIN) went public in April, and has been sliding since. It’s following a familiar pattern, similar to its spike-and-crash in late 2017 when major exchange operators started listing Bitcoin futures — riding the hype cycle up before a big announcement and then falling quickly afterward.
Bitcoin had climbed in part because of enthusiasm from retail investors, who have been able to trade it on mainstream payment and investing platforms such as
(SQ), and Robinhood. Cryptocurrencies such as DogeCoin had soared too, but have since crashed. DogeCoin now trades at 16 cents, down from highs above 70 cents earlier this year. Robinhood, which plans to go public next week, warned prospective investors in a Monday filing that cryptocurrency trading was likely to slump in the third quarter and hurt its revenue.
Regulatory pressure on Bitcoin is growing, with China warning financial institutions to stop dealing in cryptocurrencies, and pushing miners out of the country.
“If Bitcoin falls below the $30,000 level, momentum selling could look for an easy test of the $28,900 level,” Moya wrote on Monday. “That could be the line in the sand for defending a deeper plunge toward the $25,000 which at that point would lead to many sellers eyeing the psychological $30,000 level.”
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