The world’s largest cryptocurrency has erased all the gains it clocked up following Tesla Inc.’s Feb. 8 announcement that it would use corporate cash to buy the asset and accept it as a form of payment for its vehicles. Now traders are bracing for more pain as the token breaches a key technical level.
Bloomberg reports that prices for the digital asset dropped by 12% to about $38,000 as of 7:38 a.m. in New York. It’s now down around 40% from its record of almost $65,000 set in April. Other crypto tokens dropped in tandem on Wednesday, with Ether losing more than 20%.
Fuelling the volatility is Tesla CEO Musk himself, whose social-media utterances have whipsawed the crypto community. A statement from the People’s Bank of China on Tuesday reiterating that digital tokens can’t be used as a form of payment added to the selloff.
Now, as Bitcoin takes out its 200-day moving average, chart-watchers are warning of more danger ahead.