Bitcoin fell 4.4% on Friday, falling below $ 9,000 for the first time in two weeks.
Analysts have pointed to the lack of positive market factors and the possibility that the US Federal Reserve will suspend the rate reduction cycle this year, which could dampen demand for cryptocurrency as a hedge against inflation.
The price fell to $ 8,800 from 18:57 UTC (13:57 New York time), according to Trading View. This is still more than double the number of bitcoins at the beginning of the year, making cryptocurrency one of the best-performing asset classes in the world in 2019.
Bitcoins mobilized more than $ 2,000 in late October, after Chinese President Xi Jinping said the country would adopt the blockchain – the decentralized computer networks underlying cryptocurrencies – as a "core" technology, followed by the revelation of hundreds of blockchain projects already underway. Since then, however, the price has fluctuated in the range of $ 9,100 to $ 9,600.
Friday's decline accelerated after bitcoin surpassed its moving average of $ 9,186 over 200 days, which was perceived as price support by some traders using technical analysis.
"It's a pretty classic example of technical change," said Kevin Kelly, co-founder of Delphi Digital, a New York-based cryptocurrency research company. "He just sort of broke down."
The drop in prices seems to have triggered margin calls for some operators, resulting in positional liquidations and additional selling pressure, Kelly said.
One of the macroeconomic stories of buying bitcoins is that, like gold, it can be used as a hedge against inflation, Kelly said. But with more and more signs indicating that the economy could react to the Fed's three interest rate cuts earlier this year, it is questionable whether the US central bank could abstain in the short run. the end of any easing of monetary policy, he said.
"You have witnessed a relaxation of consensus on this catastrophic story," Kelly said.
According to Greg Cipolaro, co-founder of Digital Asset Research, some investors may have become more skeptical about China's pressure to use the blockchain to generate new demand for bitcoins.
Although many traders believe that bitcoin, as an original blockchain and leading digital asset by market value, could benefit from wider adoption of technology, if China was working on the development of A digital version of its own currency, this could be a victory for blockchain technology. All in all but little for Bitcoin today.
"My opinion is that it was not the right reading of this news," Cipolaro said. "They clearly said blockchain not bitcoin."
With this achievement as a backdrop, "you really have not seen price tracking," he said. "There was no major catalyst that cost $ 2,000 two weeks ago."