(Bloomberg) – Bitcoin extended losses on Tuesday, falling to the lowest level since August after a global selloff in riskier assets sent the overall cryptocurrency market value back below $ 2 trillion. .
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The largest digital currency fell as much as 7.6% to $ 40,237 before reducing part of the decline. The second-largest token, Ether, was trading below $ 3,000, while Cardano, Solana, Polkadot and Dogecoin also fell, according to tracker CoinGecko. They were all changing their lows for the day.
Virtual currencies were stirred amid fears of contagion from the liquidity crisis in China Evergrande Group, the world’s most indebted developer. A global stock market pullback eased a bit in Asia on Tuesday, although the Evergrande troubles and the looming Federal Reserve meeting remain potential triggers for volatility.
“Bitcoin and Ether are being swept away by the risk reduction momentum that has been gaining since the end of last week,” said Adam Reynolds, CEO Asia-Pacific at Saxo Capital Markets Pte. He expects “more sell-offs to come.”
Approximately $ 1.4 billion in cryptocurrency settlements occurred in the last 24 hours, according to data from Bybt.com. This happens when leveraged positions are closed by exchanges for not meeting margin requirements.
From a technical perspective based on Bitcoin price charts, the token has drawn a hammer pattern just above the lower edge of the so-called Ichimoku cloud. That suggests that the next key support level to watch out for is around $ 39,900.
Katie Stockton, founder of Fairlead Strategies, pointed to the same level as potential support in a note, while the addition of Bitcoin is still in a long-term uptrend.
Bitcoin is up more than 40% in 2021, while Ether has quadrupled and the broader Bloomberg Galaxy crypto index has more than doubled.
Cryptocurrencies remain controversial investments. Some see them as highly volatile and purely speculative with little intrinsic value, while others argue that institutional adoption will grow, moderating volatility and supporting prices.
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