Bitcoin Plunges Below $30,000 For First Time Since July 2021
Bitcoin fell 3.1% to $29,992 in Asian trading.
Bitcoin extended losses, falling below $30,000 for the first time since July 2021, plunging more than 55% from November’s record high amid a global flight from risky investments.
The world’s largest digital token in Asian trading fell 3.1% to $29,992. Ether is down 3.7%, while Solana is down 8.2% and Avalanche is down 10.4%.
Josh Lim, head of derivatives at New York-based brokerage Genesis Global Trading, said “we are seeing a slowing downturn, partly because it is mostly long-holder selling” rather than leveraged liquidation. “Now that some corporate treasuries are hovering over their cost basis, the markets are waiting and seeing if shareholders will force some de-risking.”
Monetary policy tightened as cryptocurrencies tighten liquidity curbs to counter runaway inflation, turning investors away from speculative assets in global markets.
Billionaire cryptocurrency investor Michael Novogratz, who heads Galaxy Digital Holdings Ltd, warned that he expects things to get worse before they get better.
“Unless we strike a new balance, crypto probably belongs to the Nasdaq,” Novogratz said on Galaxy’s first-quarter earnings call on Monday. “My tendency is to have some more losses, and that will lead to a very volatile, volatile and difficult trading market for at least the next few quarters before people get the sense that we are in equilibrium. ”
Doo Kwon, the founder of TerraForm Labs, which powers the Terra blockchain, is moving to shore up his algorithmic stablecoin, as the cryptocurrency lost its peg to the dollar midway through the market.
The Luna Foundation Guard, the consortium created to support decentralized tokens and the Terra blockchain, said it will issue a loan of about $1.5 billion in bitcoin and TeraUSD to help strengthen the peg of TeraUSD as it closes on Saturday at $1.5 billion. fell below 1 as the crypto markets continued to decline.
Kwon caught the attention of the crypto world earlier this year by pledging to buy over $10 billion in bitcoin to promote Terra.
‘look carefully’
“We are watching closely how the market fares over the next 24 hours,” Steven Golden, Senior Research Analyst at crypto market maker Cumberland DRW, said in an email. “This includes whether introducing mechanisms to help increase dependency, such as LFG lending bitcoin to OTC trading firms, will be enough to keep them in times of deep stress or if we need additional stabilization mechanisms. is required.”
The coin’s decline risks putting it firmly out of trading range in 2022, completely reversing the most recent bull run that took the coin to a record nearly $69,000 in November.
Any further hit to equity sentiment would risk pulling bitcoin down as well, according to data compiled by Bloomberg, with its 40-day correlation with the S&P 500 stock benchmark.
