Bitcoin broke below $8,000 for the first time in nearly a month as its recent sell-off dragged on for the seventh straight day.
“This price drop is a technical move; this is where the price was before the news of China’s support of blockchain, which is not crypto,” said Joe DiPasquale, chief executive officer of BitBull Capital. “So, the price of Bitcoin is simply returning to normal. However, more downside cannot be ruled out, since the recent drop has turned sentiments to negative.”
The largest cryptocurrency’s slide on Thursday snowballed into the $7,000s, territory it hasn’t penetrated since late October. The token also slipped below its 200-day moving average line, an event considered a sell signal by many analysts and chartists, provided the asset doesn’t quickly recover.
“We are seeing 1,000 Bitcoin trade per minute” in dollars and and 2,000 Bitcoin using the stablecoin Tether, with the euro pair at 300 per minute, Charles Hayter, chief executive officer of digital asset data provider CryptoCompare, wrote in an email. “This is standard for the market with clusters of volatility, and buses seem to all come at once.”
As with many things crypto, analysts and investors have had trouble isolating an exact catalyst for the sell-off. Many have pointed to China’s latest crackdown on the nascent market. While the Asian nation as recently as last month said it may start to embrace the blockchain technology that supports cryptocurrencies, it has since taken steps to curb crypto trading.
Watchdogs in Shanghai, for instance, issued notices calling for a cleanup of companies involved in trading of digital assets, while one in Beijing warned against illegal exchange operations.
Bitcoin was down 6.4% as of 1:14 p.m. on Thursday to trade at $7,573 and has dropped about 18% this month, data compiled by Bloomberg show. The Bloomberg Galaxy Crypto Index, which tracks major cryptocurrencies including Bitcoin and Litecoin, has lost more than 15% in November.
“Sentiment is generally poor right now — obviously holidays are coming up, we haven’t seen as much institutional pickup of tools like Bakkt, for example, that people were expecting,” DiPasquale said. “There’s technical analysis-wise more things that point to bearish signals.”