Cryptocurrencies languished, mirroring equity markets, although regulation and fundamentals are “moving in the right direction”.
Bitcoin, the largest coin by market cap, fell 1.84% to US$38,979, falling and staying below the key support level of US$40,000.
Ethereum, on the other hand, fell 3.38% to US$2,849, also trading below its own key support level of US$3.000 and changing hands at its lowest level in over a month.
Recently, cryptos are increasingly following the movement of the equity markets, in particular, the tech-heavy Nasdaq and Hang Seng.
The Nasdaq lost 2.55% to 12,839 while the Hang Seng is currently down 3.55% to 19,904.
According to Naeem Aslam, a market trader at Avatrade, Bitcoin moving below US$40,000 has “set a negative tone for cryptos.”
“US$40,000 is an important price level, and traders do not want to see the price keep falling below this price level again and again as this gives more power.”
Aslam does add, however, that there is “no doubt that they are moving in the right direction” when referring to cryptocurrency regulation and their fundamentals.
“It certainly seems that UAE is becoming the hub of cryptocurrencies, and this is primarily due to the region presenting itself as an early adopter and also providing a transparent regulatory environment for the crypto space.”
“One of the biggest crypto exchanges, Kraken, is to launch in the UAE. This is only going to increase institutional capital flow, and we are likely to see more money going into bitcoin.”
In some of the altcoins, Solana fell 4.68% to US$97.08, Terra lost 1.82% to US$90.24 and Avalanche fell 4.60% to US$69.70.