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Bitcoin drops below $35,000 Saturday as global market selloff spreads to cryptocurrencies

MarketWatch
MarketWatch
 2022-01-22
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(FILES) This file photograph taken on January 8, 2021, shows a Bitcoin digital currency logo on the front door of an ATM in Marseille, southern France. - Bitcoin's value plunged on May 19, 2021, after China signaled a new crackdown on the cryptocurrency, but its losses were cushioned after Tesla head Elon Musk spoke up on Twitter. The virtual currency fell to almost $30,000 -- less than half the record value it reached last month -- before climbing back over $39,500 around 2000 GMT. It was still above its level at the start of the year. Bitcoin recovered somewhat following tweets from Musk that featured a diamond and hands emoji, taken as a signal the company had not sold off its huge bitcoin holdings as the CEO appeared to suggest recently. (Photo by NICOLAS TUCAT / AFP) (Photo by NICOLAS TUCAT/AFP via Getty Images) By nicolas tucat/Agence France-Presse/Getty Images
CRYPTO https://img.particlenews.com/image.php?url=2BEOiM_0dreIy2n00

Bitcoin prices were trading at levels not seen since August on Saturday, as a selloff of perceived riskier assets spread to cryptocurrencies. Bitcoin has now shed more than 50% from its record high in November

Bitcoin (BTCUSD) fell as low as $34,042.78 Saturday, a drop of 7.2%, before paring losses. Other digital assets also slid, with Ethereum (ETHUSD) down 12%. Solana and Cardano each fell at least 17%, according to Coinbase.

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The declines followed a volatile session on Wall Street on Friday that saw stocks swing from early gains to a selloff, as investors repeated this week’s pattern of selling rallies, pushing the Nasdaq Composite (COMP) deeper into correction territory.

“The pessimism continues to grow among investors and traders when it comes to riskier assets and this is chiefly influencing the price of equities and bitcoin,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.

“The thing with bitcoin is that when it begins to fall, the price action drops like there is no tomorrow,” said Aslam, who added that January also tends to be a volatile month for the cryptocurrency on a historical basis.

Aslam also cited a proposal from Russia’s central bank on Thursday to ban the use and mining of cryptocurrencies . Russia is one of the world’s leading bitcoin mining locations, and joins China, which imposed its own ban on activity last year.

“Many altcoins are into support at their summertime 2021 lows, making it critical that bitcoin holds support as it sets the tone for the cryptocurrency space,” Katie Stockton, managing director of Fairlead Strategies, a technical research firm, wrote in a Friday briefing. Stockton assigns a 30%-70% probability of a continued breakdown below current BTC price levels.

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