‘Altcoins’ Lead Crypto Fall as Bitcoin Bounces Around $20,000

Cryptocurrency losses deepened, with popular Defi tokens such as Solana and Avalanche falling more than bitcoin, as contagion concerns mount in the wake of the collapse of hedge fund Three Arrows Capital.

Bitcoin It dipped below $20,000 for the first time in nearly a week as the token’s lack of sustained bullish momentum caused some technical analysts to raise the possibility of further declines.

The cryptocurrency The largest fell as much as 2% before recovering slightly to trade at $20,068 at 9:09 a.m. in New York. The MVIS CryptoCompare Digital Assets 100 Index, which measures 100 of the top tokens, fell as much as 4.1%. Solana fell as much as 6.2% and Avalanche fell as much as 7.2%.

“Most short-term technicals point to an above-average chance of a final ‘washout’-style decline before this bottoms out”Mark Newton, a technical strategist at Fundstrat, said in a note on Tuesday. Bitcoin has room to drop as low as $12,500 to $13,000, “which I hope will be a great place for medium-term buyers to join long-term buyers”wrote.

The relatively stable trade of Bitcoin since crashing to a low of $17,560 on June 18 had fueled optimism that the battered crypto market was setting the stage for a rebound. However, the sector remains under pressure from central bank efforts to drain liquidity, as well as a series of high-profile crypto explosions that have hit investor confidence.

More stable crypto prices recently have likely brought some relief “given the flow of negative headlines in recent months”, said Craig Erlam, senior market analyst at Oanda. “I’m afraid more may follow in the coming weeks and I wonder if the community does too, given their inability to gain traction above $20,000.”