The largest cryptocurrency is “dangerously approaching the US$30,000 level” amid growing regulatory fears in the US, and “a break of US$30,000 could see a tremendous amount of momentum selling,” said Edward Moya, senior market analyst with Oanda Corp.
Bitcoin has dropped about US$32,000 from its April record, roiled by a rebuke from billionaire Elon Musk over the energy it requires as well as a renewed regulatory crackdown in China. The ability of US authorities to recover a high-profile Bitcoin ransom also dented the idea that it’s beyond government control, which has been an article of faith for some of the coin’s supporters.
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Evercore technical strategist Rich Ross and Tallbacken Capital Advisors’ Michael Purves have both flagged the US$20,000 area as a potential key level if Bitcoin breaks much lower than where it is now.
Others, however, remain confident about the longer-term outlook. For instance, Michael Saylor’s MicroStrategy Inc. boosted a junk-bond sale to US$500 million from US$400 million to fund the purchase of more Bitcoin. MicroStrategy has emerged as one of the most bullish public companies on cryptocurrencies.
About a week after Bitcoin’s mid-April all-time high, Purves had argued the bullish case looked “highly challenged.”
“How much lower can it go?” Purves asked in his note Tuesday. “The most obvious answer continues to be a complete retracement of the breakout from US$20,000 – in other words, back to US$20,000.”
Cover photo and chart: Bloomberg
