Bitcoin Slips Below Key $ 30,000 Support As Stock Market Bounce Leaves Cryptos Behind

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U.S. stocks roared on Tuesday after the drop in the previous days, but crypto assets continued to struggle, with bitcoin falling below a long-watched line in virtual sand at $ 30,000.

The world’s most popular crypto asset BTCUSD, -3.28%, was down $ 1,192.15, or 3.9%, to 29,688.20, according to FactSet, for a weekly decline of more than 5 %. In addition, the fall below $ 30,000 sounded the alarm.

The digital asset has passed its key support level of $ 30,000, it is critical that the digital coin regain ground above the $ 30,000 level as a major breach could lead to a technical sell-off, Naeem said Aslam, chief analyst at Ava Trade, in a Tuesday note.

At the same time, Aslam said, crypto traders remain well aware that crypto price action is notoriously volatile. Bitcoin briefly fell below $ 30,000 on June 23. Bitcoin traded at an all time high above $ 60,000 in April.

Other crypto prices were also under pressure. Ethereum ETHUSD, -1.53% was down 1.5% to $ 1,791.92. Dogecoin DOGEUSD, -1.41%, the joke token, was down 0.7% to $ 0.1724.

Analysts blamed the wider drop in crypto assets in part on China’s efforts to clamp down on mining and trading activity. The People’s Republic has banned bitcoin trading, and the government has also banned popular apps from trading in crypto.

Aslam said there could be a possibility of a rebound, noting that bitcoin’s two-week relative strength index, a technical tool that measures asset price dynamics, was approaching oversold territory, which has trended to precede strong rebounds in prices.

Assets perceived to be risky plunged on Monday as the Dow Jones Industrial Average DJIA + 1.79% suffered its biggest one-day drop since October. Stocks were in rebound mode on Tuesday, with the Dow Jones rising more than 600 points, or 1.8%, to recoup much of the decline from previous sessions, while the S&P 500 SPX, + 1.72%, has rose 1.7% to turn slightly positive for the week.

Mark DeCambre contributed reporting.

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