The latest selloff in Bitcoin has brought the cryptocurrency closer to the levels seen in May. This has led to questions on how low the cryptocurrency can fall.
Bitcoin has dropped about 7 percent this week and was trading at about $34,200 on Wednesday. Further weakness in the cryptocurrency can lead to a fall to $20,000, as per some of the analysts.
Bitcoin is dangerously approaching the $30,000 level and a break of $30,000 could see a tremendous amount of momentum selling, Bloomberg quoted Oanda Corp Senior Market Analyst Edward Moya as saying.
Bitcoin has dropped about $30,000 from its April record, roiled by a rebuke from billionaire Elon Musk over the energy it requires as well as a renewed regulatory crackdown in China. The ability of U.S. authorities to recover a high-profile Bitcoin ransom also dented the idea that it’s beyond government control, which has been an article of faith for some of the coin’s supporters.
Evercore technical strategist Rich Ross and Tallbacken Capital Advisors’ Michael Purves have both flagged the $20,000 area as a potential key level if Bitcoin breaks much lower than where it is now.
Others, however, remain confident about the longer term outlook.
For instance, Michael Saylor’s MicroStrategy Inc. boosted a junk-bond sale to $500 million from $400 million to fund the purchase of more Bitcoin. MicroStrategy has emerged as one of the most bullish public companies on cryptocurrencies. In El Salvador, President Nayib Bukele said the nation has adopted Bitcoin as legal tender.
Meanwhile, US-based MicroStrategy Inc, a major bitcoin corporate backer, on Tuesday said it was offering $500 million in bonds, and the proceeds will be used to buy Bitcoins.