Bitcoin prices traded at levels not seen since August and fell below a key level of support on Friday as the sale of perceived riskier assets spread to cryptocurrencies.
Bitcoin BTCUSD,
-6.47%,
The world’s largest cryptocurrency by market capitalization fell more than 7% to $ 39,010, bringing it below the key level of $ 40,000 in a slippage that began late Thursday. ether ETHUSD,
-8.52%,
running on ethereum blockchain, has dropped 8% to about $ 2,878 and XRP XRPUSD,
-6.83%,
Bitcoin Cash BCHUSD,
-6.96%,
Litecoin LTCUSD,
-8.20%
a Monero XMRUSD,
-5.31%
all reported heavy losses, according to Kraken.
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The declines followed a volatile session on Wall Street, when stocks jumped from first earnings to a sell-off, repeating Wednesday’s action, especially for Nasdaq Composite COMP,
-0.39%,
which pushed deeper into the correction territory.
“Pessimism among investors and traders is still growing when it comes to riskier assets, and this mainly affects the price of stocks and bitcoins,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.
“With bitcoins, when it starts to fall, price action falls as if there was no tomorrow,” said Aslam, adding that January is a historically volatile month for the cryptocurrency.
He blamed the decline for several factors, including a growing loss of anti-inflationary status for bitcoins and other cryptocurrencies, with the Federal Reserve and other global central banks expected to bring inflation under tighter policies.
Aslam also cited Thursday’s proposal by the Russian central bank to ban the use and mining of cryptocurrencies. Russia is one of the world’s leading bitcoin mining sites and joins China, which imposed its own ban last year.
Senior market analyst Oanda Edward Moya predicted earlier on Thursday that bitcoin could fall below $ 40,000 due to Russia’s proposal.
The admission mechanism also remains slow, Aslam said.
Aslam said the adoption mechanism appears to have slowed. “When Elon Musk announced that consumers could buy Tesla TSLA,
-1.22%
with bitcoin pushed the price of bitcoin higher. Previously, we had reports that PayPal PYPL,
-1.12%
began to receive bitcoins. These types of reports greatly supported the price of bitcoin. We miss all this today, which is why the price of bitcoin is falling in order to find love among traders, “he said.
Read: Dogecoin flies after Elon Musk tweets, you can buy some Tesla goods for a meme coin
Bitcoin prices fell by 16% in January and have fallen by 36% in the last three months.
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