This illustration from May 19, 2021 shows the virtual currency Bitcoin in front of a stock chart.
Given Ruvic | Reuters
Bitcoin fell below $ 30,000 for the first time since June 22, dragging other digital coins down.
According to CoinMarketCap data, about $ 89 billion was wiped from the entire cryptocurrency market in a 24-hour period at 6:29 a.m. ET on Tuesday.
Bitcoin was down more than 5% while Ether was down over 6% and XRP was down nearly 9%, according to CoinDesk data. Despite the slump, Bitcoin is up 1.87% for the year. Ether and XRP are up about 135% over the year.
The Bitcoin slump came after a major sell-off in global equity markets. On Monday, the Dow Jones Industrial Average had its worst day since last October.
“There has been a widespread sell-off in global markets, risk assets have plummeted across the board,” said Annabelle Huang, partner at cryptocurrency financial services company Amber Group.
There are “concerns about the quality and strength of the economic recovery” and “more general risk assets have weakened, including high returns,” Huang said. “Coupled with the recent BTC (Bitcoin) weakness, this has only sent the crypto market further down.”
Read more about cryptocurrencies from CNBC Pro
Since Bitcoin’s all-time high of nearly $ 65,000 in mid-April, the price has fallen by over 50%.
Regulators around the world are also taking a closer look at the crypto space.
Binance, the world’s largest cryptocurrency exchange, was prevented by UK authorities from conducting regulated activities in the country last month. Regulators in Japan, Canada and Thailand have also issued warnings about Binance.
“In general, we are seeing a stronger regulatory focus on crypto and bitcoin,” said Vijay Ayyar, head of business development at the Luno cryptocurrency exchange.
More upfront sales?
Bitcoin’s drop below $ 30,000 could be important, according to Ayyar, who said the sell-off could decrease to test the $ 22,000- $ 24,000 level.
From then on, Bitcoin could be traded in a range.
“I would see bitcoin between 20-40,000 ($ 20,000 to $ 40,000) for a while before the upside returns,” Ayyar said.
Kinetic Capital’s Chu also sees potential sales opportunities.
“The momentum of the crypto market stalled in the first quarter and threatens another reversal, possibly below the $ 25,000 level,” Chu said.