Bitcoin continued its volatile streak on Tuesday, starting the day plunging below the all-important $ 30,000 mark and then rallying all the way back into positive territory. On Tuesday, it briefly turned negative for 2021 before recovering.
Near its daily low, Bitcoin fell more than 11% to around $ 28,911, below the $ 29,026 level where it ended in 2020, according to Coin Metrics. The cryptocurrency then rebounded and most recently rose 0.2% to $ 32,562.00 in the session, according to Coin Metrics.
Technical analysts had seen the $ 30,000 level on the charts as a major support level after the cryptocurrency fell almost to that low during its May crash.
Mike Novogratz, CEO of Galaxy Digital, had stated Tuesday morning in CNBC’s “Squawk Box” that Bitcoin could still recover after the early decline and if it did not recover there was a clear downward trend to the next support level.
“Thirty thousand, we’ll see if it holds that day. We could fall below it for a while and close above it. If it really breaks, $ 25,000 is the next big level of support,” Novogratz said. “Look, I’m less happy than $ 60,000, but I’m not nervous.”
Bitcoin struggled to regain its highs from the beginning of the quarter. After some market-moving tweets from Elon Musk about Bitcoin-related environmental concerns, it fell dramatically in May, and further declined in early June on fears about the use of cryptocurrency in the Colonial Pipeline ransomware attack.
It has since been on a roller coaster ride, battered by a barrage of headlines from China, where regulators placed new restrictions on energy-intensive mining and ordered financial institutions like Alipay to stop doing business with crypto companies. The price briefly hit $ 40,000 last week and fell again on Monday.
With Tuesday’s losses, Bitcoin halved from its all-time high of more than $ 64,000 in mid-April, taking other cryptocurrencies with it. Ether fell 5.6% and Dogecoin fell 12%.
The cryptocurrency market has seen significant setbacks before, with Bitcoin dropping about 80% from its late 2017 highs at one point. Professional crypto investors have warned that the space should continue to be volatile for years to come.
“The only guarantee of the cryptocurrency space is volatility, and obviously we have that right now,” Katie Stockton, founder of Fairlead Strategies, told CNBC. “This is not new, we’ve had days like this, it’s just about navigating this noise.”
Crypto investment product providers like CoinShares, Grayscale and Bitwise are seeing their sixth straight weeks of outflows, although some providers are seeing inflows, according to CoinShares. The bearish sentiment is more focused on Bitcoin, with outflows totaling $ 89 million for the week and a total of $ 487 million for the year, or 1.6% of assets under management. In contrast, ether outflows are $ 1.9 million for the week and $ 14.6 million for the year, or 0.14% of the AUM.
Novogratz also noted that despite previous setbacks, crypto market infrastructure is only getting more mature, which has added more institutional support over the past year, with large hedge fund managers, pension funds and banks moving into crypto while registered investment advisors look for ways to attract clients to one Connect with cryptocurrencies in a manner compatible with their current workflow and wait for custodians to roll out crypto services.
Bitcoin price rose nearly 500% between mid-September and its peak in April. Despite the recent decline, the cryptocurrency is still up more than 200% in the past 12 months.