Another painful week for Bitcoin could point to more problems for the world’s largest cryptocurrency, with some analysts calling for $ 20,000 as a bearish target.
Another bad week for Bitcoin could be a precursor to more pain to come, according to strategists watching the sale of cryptocurrencies.
A new weakness in its price could make the $ 20,000 area a bearish target, according to Oanda Corp., Evercore ISI and Tallbacken Capital Advisors LLC. Bitcoin has fallen about 7% this week and was trading at about $ 34,200 as of 10:16 a.m. in London.
The largest cryptocurrency “is dangerously close to the $ 30,000 level” amid growing regulatory fears in the U.S., and “a $ 30,000 breakout could result in a huge amount of boost sales,” said senior analyst Edward Moya Oanda Market Corp.
Bitcoin has fallen about $ 30,000 from its April record, sparked by a reprimand from billionaire Elon Musk over the energy it requires, as well as renewed regulatory repression in China. The ability of U.S. authorities to recover a high-profile Bitcoin bailout also damaged the idea that it is out of government control, which has been an article of faith for some of the currency’s supporters.
Evercore technical strategist Rich Ross and Michael Purves of Tallbacken Capital Advisors have marked the $ 20,000 area as a potential key level if Bitcoin breaks well below what it is now.
Others, however, remain confident in the long-term outlook.
For example, MicroStrategy Inc. of Michael Saylor increased the sale of junk bonds to $ 500 million, from $ 400 million, to finance the purchase of more Bitcoin. MicroStrategy has become one of the most bullish public companies in cryptocurrencies. In El Salvador, President Nayib Bukele said the nation has adopted Bitcoin as its legal tender.
Still, about a week after Bitcoin’s mid-April record high, Tallbacken’s Purves had argued that the bullish case seemed “highly challenged”.
“How much can you get down?” Purves asked in his note Tuesday. “The most obvious response remains a complete $ 20,000 breakout, or $ 20,000.”
Meanwhile, the debate over the heavy police of cryptocurrencies is intensifying. According to a Financial Times interview, Hester Peirce, commissioner of the Securities and Exchange Commission, said she was concerned about the push towards a more active role for regulators in the crypto market.
(Update the markets in the second paragraph.)
–With the assistance of Joanna Ossinger.