The slump for bitcoin continued on Tuesday morning as the leading cryptocurrency fell below a key level and is trading at its lowest price since January.
Bitcoin was down 8% to $29,674.25, according to Coin Metrics. Traders had warned a break below $30,000 could lead to more losses.
Technical analysts had been watching the $30,000 level as a key support level on the charts after the cryptocurrency had fallen to near that low during its May crash. The analysts, who study charts to make buying and selling decisions, believe the next level to watch for support could now be as low as $20,000.
Now that it is approaching $29,000, the price of bitcoin is threatening to turn negative for the year.
Galaxy Digital CEO Mike Novogratz said on CNBC’s “Squawk Box” that bitcoin could still rebound after Tuesday’s move but there was significant downside to the next support level.
“$30,000, we’ll see if it holds on the day. We might plunge below it for a while and close above it. If it’s really breached, $25,000 is the next big level of support,” Novogratz said. “Listen, I’m less happy than I was at $60,000 but I’m not nervous.”
The prices of bitcoin and other cryptocurrencies have been battered in recent weeks by a stream of headlines out of China, where regulators have imposed new restrictions on energy-intensive mining and reiterated rules for financial firms about providing crypto services.
Environmental concerns have also become a new flashpoint for the asset class, with Tesla CEO Elon Musk suspending the use of bitcoin as payment for vehicles and saying that the pause would remain in effect until miners use more clean energy.
With Tuesday’s losses, bitcoin has slid about 54% from its all-time high of more than $64,000 in mid-April.
Other cryptocurrencies were also facing pressure, with ether falling 8% and dogecoin dropping more than 16%.
Significant pullbacks have happened before in the cryptocurrency market, with bitcoin falling about 80% from its late 2017 highs at one point. Professional crypto investors have warned that the space should continue to be volatile in the years ahead.
Bitcoin and other cryptocurrencies have gained more institutional support over the past two years, with major hedge fund managers and banks getting involved in the space.
The price of bitcoin rose nearly 500% between mid-September of last year and its April peak. Even with the recent decline, the cryptocurrency is still up about 150% over the past 12 months.
