Bitcoin price fell below the psychologically important $ 50,000 level on Friday as concerns about rising US taxes shifted to cryptocurrencies and recent pressures on these alternative investments increased.
Bitcoin prices BTCUSD, -4.09%, last changed hands at $ 47,659, a 12% drop in 24 hours and levels not seen since early March, according to Coindesk. The losses were spread across other cryptocurrencies, with the ether ETHUSD being -4.25%,
in the Ethereum network, which also fell around 13% over the same period and was trading at USD 2,120. XRP XRPUSD, -12.52%,
The Ripple-linked company lost 22% in 24 hours and was last trading at $ 1.01.
The new losses for Bitcoin represent a decrease of around 26% from the recent high of $ 64,829 for the cryptocurrency. A decrease of 20% corresponds to the generally accepted definition of a correction. Bitcoin saw a sharp decline over the past weekend, although the volatility of the cryptocurrency means a decline of more than 10% is not uncommon. Fears of increased regulation were at the center of the withdrawal last Sunday.
Friday’s losses follow a more than 300 point loss for the Dow Industrials DJIA, + 0.49% after a media report that President Joe Biden is considering a plan to nearly double capital gains tax on the rich.
“It is clear that Bitcoin is more sensitive to tax threats from investment income than most asset classes. The threat of regulation, either directly in developed markets or indirectly through the tax inspector, has always been the Achilles heel of crypto in my opinion, “Jeffrey Halley, senior market analyst at Oanda, told clients in a note.
Halley said the next level of bitcoin to look out for is $ 42,000, which “could be this weekend or next week or maybe not at all”.
“Hopefully we’ll hear as many ‘experts’ say this is a sign that Bitcoin will become a ‘mainstream mature asset’ if it falls 10% this weekend as we do if it goes up or down a crypto exchange decides to go public. ” he said.
A number of analysts have warned of a short-term decline in Bitcoin as the cryptocurrency continued to decline (+ 2.56%) after hitting an all-time high of over $ 64,000 following the direct listing of the Coinbase COIN cryptocurrency platform..
Opinion: Warren Buffett could tell traders in Dogecoin, GameStop, and other hot trends a few things about ‘Mr. Market’