Bitcoin is on track to record its worst monthly performance of the year, according to Bloomberg, though technical signals suggest its latest decline may be coming to an end. Over the weekend, Bitcoin retested its May high gap and then rebounded, which may indicate that its price drawdown is losing momentum. As the gap was filled, Bitcoin reached the same price level as it did before the May rally. That means Bitcoin could be supported by around $6,500, about 8% below current prices.
Cryptocurrencies have fallen this month after China took steps to crack down on virtual currency trading. Chinese bank said this week that more than 170 platforms offering cryptocurrency trading and IPO services had been closed. A previous report said the central bank had asked investors to be alert to virtual currencies and that companies involved in digital assets should correct any wrongdoing.
The latest sell-off has sent bitcoin down for 10 consecutive trading days, including Tuesday’s decline. Bitcoin has fallen 23 per cent so far in November, giving it the worst monthly performance of the year.
“The cryptocurrency market is clearly shrinking and there is no new capital to absorb supply,” said Jeff Dorman, Arca’s chief investment officer. “The market has been very weak, thanks to a series of adverse developments, including China’s crackdown on cryptocurrencies.
Bitcoin fell 2.6 percent on Tuesday, its lowest level in six months over the weekend. The Bloomberg Galaxy crypto-label index, which tracks some of the biggest cryptocurrencies, fell 1.6 percent to its lowest level since April.