Bitcoin extended its five-day losing streak on Thursday and dropped below US$8,000 for the first time since June as a growing list of concerns weighed on crypto assets.
Bitcoin fell as much as 9 per cent to trade at US$7,736 in New York, according to Bloomberg composite pricing. The Bloomberg Galaxy Crypto Index that tracks a basket of cryptocurrencies slumped more than 8 per cent as peer coins, including Ether and XRP, also sold-off. That’s the lowest level since May for the index.
There is “no good catalyst to drive it higher,” said John Spallanzani, portfolio manager at Miller Value Partners. Bitcoin was never able to regain the near-US$14,000 highs it reached over the summer, he said, adding that the “market got tired and volume dried up.”
Investors cited a variety of reasons for the slump that’s seen Bitcoin lose close to 22 per cent of its value since Friday. Some pointed to a lacklustre reception to the first Bitcoin futures contracts that were offered by the Intercontinental Exchange Inc.’s Bakkt platform. Others pointed to the U.S. Securities and Exchange Commission delaying a decision on a Bitcoin exchange-traded product. Still, others said the expiration of CME futures contracts set to take place this week is causing turbulence.
Here is what market-watchers are saying:
“As the volumes on these contracts have been particularly high this week, this month’s close could be particularly volatile,” Mati Greenspan, senior market analyst at trading platform eToro, wrote in a note in reference to the CME contracts.
“A Bitcoin ETF isn’t likely to arrive on U.S. exchanges in 2019,” James Seyffart, a Bloomberg Intelligence analyst, wrote in a note. “The SEC has made clear that it’s concerned about Bitcoin price manipulation on exchanges without any regulatory oversight or surveillance.”
Falling below the US$8,000 level could mean Bitcoin would test its 200-day moving average support, which sits around US$7,000. And according to the Trading Envelope Indicator, a technical tool that smooths moving averages to map out higher and lower limits, the coin has fallen below its lower band.
Following a break below US$8,000, “a quick move back to US$6,000 would not be out of the question,” said Spallanzani.