Fears of deeper Bitcoin selloff amid slide toward $30,000 post China crackdown

Bitcoin has been assailed recently by China’s cryptocurrency clampdown and concerns about the environmental impact. The cryptocurrency's slide toward $30,000 amid China’s continued crackdown is stoking fears of a deeper selloff.

Representational image: Bitcoin. (REUTERS)

Bitcoin's slide toward $30,000 amid China's continued cryptocurrency crackdown is stoking fears of a deeper selloff.

Bitcoin fell as much as 4.3% and was trading at about $32,240 as of 9:08 a.m. in Hong Kong. Second-ranked Ether slipped 4.2% at one point and the wider Bloomberg Galaxy Crypto Index some 5.7%. The sector is under pressure after the People's Bank of China said Monday it had summoned officials from its biggest banks as well as AliPay to a meeting to reiterate a ban on cryptocurrency services.

A conclusive break below $30,000 would mean a “massive hit” to sentiment and possibly “heavy selling activity” across the cryptocurrency market, Pankaj Balani, chief executive officer of digital asset derivatives exchange Delta Exchange, wrote in an email. But he expects the coin to rebound and challenge $40,000 in coming weeks.

Bitcoin has been assailed recently by China's cryptocurrency clampdown and concerns about the environmental impact of the energy-hungry computers that underpin it. The retreat has dented the argument put forward by advocates like Michael Saylor of MicroStrategy Inc. that Bitcoin is a dependable store of value.

MicroStrategy said Monday it had purchased an additional 13,005 Bitcoins for about $489 million in cash at an average price of about $37,617. The news did little to bolster the virtual currency amid concerns that wider institutional adoption is stalling after Elon Musk and Tesla Inc. cooled on Bitcoin.

The digital coin has roughly halved from a record of $65,000 in mid-April, though over the past year it's still up over 200%. Bitcoin's price is now in the lower part of a range that's held since a May rout, Chris Weston, head of research with Pepperstone Financial Pty, wrote in a note.

“It's make or break time for crypto,” Weston said.