The largest cryptocurrency fell nearly 6% during Asian trading on Tuesday and reached a two-week low of $33,000 by 1:07 pm in Hong Kong (local time).The Bloomberg Galaxy’s broader cryptocurrency index is down 10%.
Bitcoin is still up 14% since the beginning of 2021, but it is below the level of returns on commodities as well as some metrics for European and Asian stocks.
The immediate cause of bitcoin’s decline on Tuesday was not clear, while a bitcoin ransom recovery theory paid by a US company to a hacker revealed that the cryptocurrency is not spiraling out of official control to the extent that its biggest proponents claim.
Investigators “can trace the untraceable and confiscate[ransom value]could undermine the issue of freedom, not being subject to government control,” said Jeffrey Haley, senior market analyst at Oanda, adding that the implications of this (forfeiture of a currency driven ransom Bitcoin) may have triggered a sell-off.The United States almost recovered the value of the ransom paid in bitcoin to the perpetrators of the cyberattack on Colonial Pipeline Co last month, in a sign that law enforcement authorities are able to pursue criminals online even when they operate outside the borders of the state.
Strategists such as Halley and Rich Ross at Evercore ISI are watching key technical levels for bitcoin. Halley says bitcoin’s dip below the $30,000 mark could lead to “other pullbacks,” while Ross says bitcoin could test support around 29,000. dollars.
Bitcoin retreated from its peak of nearly $65,000 in mid-April, casting a shadow over the cryptocurrency sector.
The sell-off accelerated as billionaire Elon Musk publicly criticized the amount of energy used by servers that power the cryptocurrency, and harsh Chinese regulatory oversight has dampened trader sentiment toward Bitcoin.
Vijay May, head of Asia Pacific at crypto exchange Luno Pte, said the virtual currency – which has more than tripled in 2020 – is currently experiencing a “cooling-off period” that could last “a few months”.