Bitcoin fell for a first day in four amid fears the leading digital coin by market value may slump a further 33%, sparking a sell-off amongst crypto miners.
“Less than 25% of the [Bitcoin] market cap is in profit, which echoes a scenario equal to the pre-capitulation phase in the last bear market," Naeem Aslam, Avatrade chief market analyst, said.
“If a similar capitulation event repeats, we could see the Bitcoin revisiting the price level of US$25,000 or even US$20,000.
“At US$20,000, we see much bigger bids coming in and finally marking the bottom for the Bitcoin price.”
Bitcoin retreated 5.8% to US$29,505 as the leading digital currency’s miners cashed in on their holdings because the highly energy intensive activity has been becoming less profitable.
Its biggest rival by market value, Ethereum, lost 6.9% to change hands at US$1,759.
96 of the leading 100 coins gave up value on Tuesday morning.
“Bitcoin tumbled [around] 6% to below the US$30,000 mark and a significant recovery is unlikely if we continue seeing further upside pressure on the US yields front,” Ipek Ozkardeskaya, Swissquote senior analyst, commented.
Amongst the top 10, BNB, Cardano and Solana sunk 8.9%, 8.4% and 9.3% respectively.
There were some even larger declines further down the pecking order, with Avalanche and Inter Computer plummeting 13% and 12% respectively.
In contrast, eCash soared 12% as it closed in on the top 50 cryptos in terms of market capitalisation.