Bitcoin prices were under pressure on Friday, hours after a mini flash-crash sent the cryptocurrency tumbling by more than $2,000 within minutes.
The sharp fall occurred around 6 p.m. Eastern on Thursday, taking the No. 1 digital currency
down to under $26,000, from over $28,400 earlier in the session, a fall of more than 9%. Early Friday, bitcoin was trading at $26,497, a drop of 4%.
Earlier on Thursday, the crypto’s price had dropped to levels not seen since June amid rising Treasury yields
and expectations that the Federal Reserve will push interest rates higher, after hawkish from minutes of the most recent central bank meeting on Wednesday.
Some noted the bitcoin crash coincided with the publication of a report in The Wall Street Journal that said Elon Musk’s SpaceX wrote down the value of bitcoin it owns last year and in 2021, with the space rocket maker and explorer managing a slim profit after two years of losses.
Gareth Soloway, president and chief market strategist at Strategist at InTheMoneyStocks.com, said on Twitter that owing to thin volume, the SpaceX news probably exacerbated selling “and increased the dump with so few buyers available.”
He said with the $28,000 level now taken out, the cryptocurrency has 24 hours to get back to that or risk a drop further toward $25,000. “Bitcoin at 25k is going to be an epic level psychologically. This is where news hit that BlackRock was filing for a spot ETF. The run from 25k to 31k was largely a result of the optimism of its approval,” he said.
Under $25,000, bitcoin is vulnerable to a move down to $20,000, then a test of $15,700 is possible. Soloway said that long-term, he remains bullish on bitcoin.
Yuya Hasegawa, crypto market analyst at Tokyo-based bitbank, said there were concerns over Fed rate hikes alongside China worries, with developer Evergrande Group
filing for Chapter 15 bankruptcy protection in New York late Thursday.
“From a technical perspective, bitcoin’s upward trend since the beginning of this year has come to an end, as the price also failed to maintain the ascending trend line, which guided this year’s rally,” Hasegawa said in a note to clients.
Investors are also looking ahead to a decision by the Securities and Exchange Commission, as soon as Friday, on whether it had erred in refusing crypto asset manager Grayscale permission to convert its bitcoin trust
into an exchange-traded fund.
“A victory for Grayscale would be momentous, possibly accelerating the approval of a spot ETF and potentially triggering a substantial rally in trust products like $GBTC and $ETHE,” said Sean Farrell, head of digital asset strategy at Fundstrat, in a note to clients.
Also read: Bitcoin halving events helped crypto rally before, but maybe not this time