Many crypto investors are still struggling to explain the sudden plunge in digital assets this week. A look at technical indicators doesn\u2019t paint a pretty picture going forward.<\/p>\n
While Bitcoin is holding above the $8,000 level, a breach below would test its 200-day moving average support, which sits around $7,000. In addition, the GTI Global Strength Indicator — a measure of upward and downward movements of successive closing prices — shows the coin hasn\u2019t dipped yet into oversold territory, which could portend further declines.<\/p>\n
For weeks, all was calm in the crypto universe as traders awaited new regulatory developments. But cryptocurrencies sold off on Tuesday, with Bitcoin dropping below $9,000 for the first time in three months. On an intraday basis, Bitcoin\u2019s 17% drop was its largest since January 2018. It extended its decline for a fourth day on Wednesday to trade at $8,332 as of 12:35 p.m. in New York, bringing its slump to 18% in that period.<\/p>\n
Most other peer coins, which were also hit on Tuesday, staged a comeback from the\u00a0plunge. Ether gained as much as 6% while XRP rose about 4%.<\/p>\n
As often happens in the cryptosphere, investors posed a variety of explanations for the plunge. To Ed Moya, senior market analyst at Oanda, it could be attributed to the tepid\u00a0reception\u00a0for Bitcoin futures contracts that settle in the digital currency. \u201cThe whole cryptocurrency market tumbled as the new federally regulated market for trading cryptos saw a very lackluster debut,\u201d Moya wrote in a note.<\/p>\n
A break below $9,000 may have caused investors to \u201cbail out,\u201d said Shawn Cruz, manager of trader strategy at TD Ameritrade. Alternatively, investors may have been moving into safer assets. \u201cYou had a massive rally in bonds yesterday at the same time. That could be behind that as well,\u201d he said by phone.<\/p>\n
Here are some additional views:<\/p>\n
Matt Maley, equity strategist at Miller Tabak + Co.: \u201cThe $9,100-$9,300 range was a key support for Bitcoin as it bounced off that level four times over the summer. Therefore, that range had become a very important support level. When it was broken, we probably saw some sell-stops elected and the whole thing began to snowball lower.\u201d<\/p><\/blockquote>\n
Mati Greenspan, senior market analyst at trading platform eToro: \u201cThere do seem to be several narratives surrounding this breakdown,\u201d he wrote in a note. \u201cEven though crypto is often touted as an uncorrelated asset class, there\u2019s no denying the strong coincidence that the U.S. stock market took a hit just a short time before Bitcoin did.\u201d He added, \u201cIn my mind, the main catalyst for last night\u2019s crypto crash was due to the underwhelming Bakkt launch. People have been buying the rumor with high hopes for months and many have now sold the disappointing news.\u201d<\/p><\/blockquote>\n
Now read: South African banks prepared for massive strike on Friday<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"
Many crypto investors are still struggling to explain the sudden plunge in digital assets this week.<\/p>\n","protected":false},"author":341034,"featured_media":228735,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[44696],"tags":[187,191],"class_list":["post-321193","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin","tag-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/321193"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=321193"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/321193\/revisions"}],"predecessor-version":[{"id":321197,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/321193\/revisions\/321197"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/228735"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=321193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=321193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=321193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}