Bitcoin had another tough day as traders fretted over the US$30,000 level and whether dipping below it would spark an even bigger sell-off.
Close to the end of trading in London, the crypto was down 4.3% at US$29,495 with other prominent cryptocurrencies such as Ethereum and Ripple also under pressure.
Bitcoin hasn’t been this low for weeks having been as high as US$65,000 in April.
“As crypto holdings dropped, demand for government bonds have risen, with yields on 10-year treasuries falling to their lowest level in five months,” said Susannah Streeter at Hargreaves Lansdown.
But there might be more to the dip than just rotation in a better performing asset, warnings from financial watchdogs and the risk of digital currencies being launched by governments are also dampening the mood alongside the crypto’s reputation.
“The intensifying crackdown in some parts of the world, with Indonesian authorities destroying bitcoin mining factories using energy illegally, has again shone the light on crypto as a magnet for criminals,’’ Streeter added.
Chartists, meanwhile, are having a field day with Bitcoin’s volatility.
According to FXStreet, a fibonnaci retracement [bounce back from an oversold position] might see the crypto recover to US$35,618.
On the downside, the next selling trigger is US$28,068, it says, after which it is US$27,383 and from then a slide towards US$25,700.