In this photo illustration, a visual representation of the digital cryptocurrency, Bitcoin can be seen in Paris, France, on February 9, 2021, ahead of the Bitcoin rate graph.
Chesnot | Getty Images
Bitcoin fell sharply on Tuesday and continued a big sell-off that began a week ago.
According to CoinDesk data, the digital currency fell over 10%, hitting an intraday low of $ 40,257.80 around 11:00 p.m. ET. It was the lowest since February 9th.
Negative news over the past week has dampened sentiment for Bitcoin.
On May 12, Tesla CEO Elon Musk said the electric car maker had suspended Bitcoin vehicle purchases, citing environmental concerns about what is known as the computational “mining” process. Powerful computers are used here to solve complex math puzzles and enable transactions in Bitcoin.
Musk’s comments resulted in over $ 300 billion being wiped from the entire cryptocurrency market that day.
Close to the bottom for Bitcoin?
Bitcoin is roughly 37% below the all-time high of $ 64,829.14 that was hit in mid-April.
Vijay Ayyar, head of business development at Cryptocurrency Exchange Luno, said a 30% to 40% pullback was “normal” during bitcoin bull markets.
“So that’s very much expected after we hit $ 64,000,” he said.
Ayyar pointed to a correction of around 35% in January, as well as similar declines during the huge spike in Bitcoin price in 2017.
“We’re definitely close to the bottom,” he said, between $ 38,000 and $ 40,000.
Bitcoin bull Mike Novogratz told CNBC on Tuesday that he saw $ 40,000 as the buy level for the digital currency. The investor, who runs cryptocurrency financial services and investment management Galaxy Digital, expects Bitcoin to consolidate in a trading range between $ 40,000 and $ 55,000.
“Then we have another leg up. And I don’t just say that by guesswork. We see institutions moving in, and it takes a while,” said Novogratz.