$10 Billion Wiped From Crypto Markets

$10 Billion Wiped From Crypto Markets
  • Bitcoin Drops Below $9,000.
  • Ethereum, Ripple's XRP, bitcoin cash and litecoin have all lost around 5%  
  • Over  $10 billion have been wiped off from the combined value of the world's cryptocurrencies.
  • Stocks slid globally on Monday alongside U.S. equity futures
  • The growing concern about the risks of the second wave of coronavirus infections may have instigated a spiral downdraft in global equities

 

Bitcoin slid below $9,000 on Monday for the first time since May.

The largest cryptocurrency tumbled as much as 5.1% Monday and recovered to about $9,100 as of 8:55 a.m. 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 $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 U.S. 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 U.S. 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 $10,000 level and are now coming back down. I expect $8,500 to hold, but if not we’re looking at $7,700 and then $7,100.”

The bearish moves point to a weaker opening for the U.S. stocks on Monday. Analysts believe it is due to investors’ fears of a second wave of virus infections amid the reopening economy.

|Opinion

Miners hold when the market is weak, not because they are bullish, but because the market can’t take it. When they can sell, it is an indication that the market is well supported,” said ByteTree founder and Chairman Charlie Morris, who added that the MRI is currently high.

Morris’ theory contradicts popular belief that miners, being sellers, would want to sell high and hoard their bitcoin when prices are expected to rise.