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Bitcoin drops below US$9,000 level for the first time since May
[HONG KONG] Bitcoin slid below US$9,000 on Monday for the first time since May, joining a downdraft in global equities begun during Asia hours amid growing concern about the risks of a second wave of coronavirus infections.
The largest cryptocurrency tumbled as much as 5.1 per cent Monday and recovered to about US$9,100 as of 8.55am in London, according to consolidated pricing data from Bloomberg. For the first time since the end of April, the token dipped below its 50-day moving average, a level that's considered a point of resistance for some traders.
Bitcoin has flirted with US$10,000 since May, failing to sustain a rally above that key psychological level after the closely watched "halving" industry event that reduced the amount of the cryptocurrency earned by miners.
Stocks slid globally on Monday alongside US equity futures, in an echo of last Thursday's risk-off mode. Chinese economic data Monday disappointed investors, with a smaller bounce back in May than economists expected. On the virus front, the US showed a pick-up in cases, Tokyo reported a jump of its own over the weekend and China is racing to contain a new outbreak in Beijing that reached nearly 100 infections.
"I think it's definitely part of the broader sell-off that we also saw in equities last week," said Vijay Ayyar, head of business development with crypto exchange Luno. "We tapped liquidity at the US$10,000 level and are now coming back down. I expect US$8,500 to hold, but if not we're looking at US$7,700 and then US$7,100."
The wider Bloomberg Galaxy Crypto Index declined on Monday as much as 6.5 per cent as rival digital currencies including Ether, XRP and Litecoin also retreated.