(Bloomberg) — Cryptocurrencies have continued to fall, sliding with global risk assets as investors price in higher interest rates for longer. A report of SpaceX selling bitcoin holdings to Elon Musk added to the concerns.
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Bitcoin fell 4.5% at 11:18 am in Singapore on Friday, and was on track for its biggest weekly decline in three months, after touching as low as $25,314. The largest cryptocurrency started to slide back from $28,947 a day earlier as global bond yields reached multi-year highs, reducing the appeal of alternative investments such as digital tokens.
The sudden drop after weeks of weak trading triggered massive liquidations across the exchanges. More than $1 billion in jobs were cut in the past 24 hours as prices plunged, according to Coinglass data. A Wall Street Journal report citing documents that SpaceX sold its bitcoin holdings after it listed $373 million also weighed on sentiment.
“With limited catalysts to push Bitcoin higher in the short term, a dip below $25,000 could put the bears in charge, and if the decline in global risk assets continues, Bitcoin could face more… from backing off.” eToro Company.
It was not clear from the WSJ report when SpaceX sold its bitcoin.
While the broader markets see a sell-off as the dollar weakens, the sell-off in digital tokens amid poor liquidity continued unabated on Friday. The measure of the top 100 digital tokens fell more than 5%, outperforming a 0.2% decline in the regional stock index.
The next support level for Bitcoin is $25,000, and a breakout could accelerate liquidations, according to analysts. Other smaller tokens also fell – Ether was down 2.3% and Cardano and Solana were down 4.4% each.
The largest single liquidation order occurred on Binance, Coinglass said on its website, with a value of $55.92 million.
The slide nearly erased the reported gains in the wake of BlackRock’s Inc.’s surprise filing. for the Bitcoin ETF on June 15. The token fell by 64% last year amid a series of scandals and bankruptcies in the industry.
A degree of optimism crept into the market after Bloomberg News reported that the US Securities and Exchange Commission is preparing to allow the first exchange-traded funds based on ether futures.
Read: SEC Set to Greenlight Ether-Futures ETFs in Crypto Industry
The decline in bitcoin comes after a period in which the cryptocurrency traded in a narrow range for several months. Metrics that measure the volatility of the native cryptocurrency’s price are trending lower, with the 90-day volatility reaching its lowest level since 2016 this week, according to data compiled by Bloomberg.
“There was optimism earlier in the week that a decision on the Grayscale Bitcoin ETF would come this week, but that passed without anything coming out,” said Shiliang Tang, chief investment officer at crypto investment firm LedgerPrime. “Moreover, traditional markets were weak all week with SPX and technology selling off, 10-year interest rates hitting record highs, the dollar stalling in bid, and weak credit data and the Chinese economy all being negatives for risky assets.”
– With the assistance of Siddhartha Shukla and Olga Khareef.
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