Bitcoin extended its slide Wednesday, breaking below US$9,000, a key level watched by analysts as a potential line of support.
The largest digital token fell for the third day, with losses amounting to nearly 9 per cent for the week. The cryptocurrency traded around US$8,795 as of 11:43 a.m. in New York.
“Cryptocurrencies are in trouble,” said Edward Moya, a senior market analyst at Oanda Corp. in New York. “Despite Wednesday’s broad relief rally, the entire crypto space is selling off. The market carnage of the past few days has investors questioning Bitcoin’s true value.”
That said, other guages point to possible support. The Bollinger Band Indicator, a measure of volatility, shows Bitcoin is close to breaching its lower limit. Such a move has, historically, led to a reversion to the mean, which could bring it back toward the US$9,700 level.
Arguments that the largest digital token acts as a place of shelter during market turmoil diminished this week as Bitcoin slumped amid an intense bout of equity-market selling. Adding to the negative sentiment were comments from famed investor Warren Buffett who said this week that cryptocurrencies “basically have no value.”
Wednesday’s sell-off was steeper for other cryptocurrencies, including Bitcoin Cash, Dash, EOS and Ether, which each fell more than 10 per cent. The Bloomberg Galaxy Crypto Index lost close to 10 per cent, its largest drop since September.
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