The Bitcoin price has gone down below a resistance level of $40,000 for the first time in around six different weeks. This slide was witnessed near the close of the day on Tuesday when the prices of BTC drew down by 16% from around $47,300, in the beginning, to close at $39,650 at around 9 pm. The move then marked a retracement of 25% from the local highs of the cryptocurrency above a sum of $50,000 on the 7th of September.
However, this pullback came immediately after the cryptocurrency had gained around 80% since it hit around $29,300 on the 20th of July after which they headed into the early highs of September.
Bitcoin Facing a Major Slump
Interestingly, Bitcoin wasn’t the only one to be suffering a sharp decline in its price on Tuesday, with 29 out of the top 30 crypto holdings by market cap going through a drawdown of 24-hours, as stated by CoinGecko. According to data received from Crypto Fear & Greed Index, the price action has been bearish which incidentally coincides with major sentiments of extreme fear across the crypto market. Just a month back, this metric had been signaling extreme greed.
Several of the outspoken critics of Bitcoin have climbed on the dip to offer apocalyptic predictions for the crypto markets, with Mr. Whale claimed that the bear market was here for the cryptocurrencies to his 300,000 Twitter followers. Peter Schiff, a notorious gold shill, has predicted that the progress of altcoins will soon be overwhelmingly demanding until the crypto bubble ends up bursting.
At the same time, Bitfinexed maintains that the credit woes of real estate developer Evergrande will also be threatening the reserves of Tether while the broader market of crypto goes through a systemic risk.
This price plunge of Bitcoin comes after the United States Securities and Exchange Commission Chairman Gary Gensler likened stablecoins to poker chips, whilst also calling for tightening regulations of the crypto sector. However, it has been seen from the reports of Crypto Twitter that there has been zealous dip-buying in response to this proactive market action.