Another bad week for Bitcoin could lead to more pain

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Another bad week for Bitcoin could lead to more pain

Bitcoin falling has Strategists Seeing Possible Drop Toward $20,000?

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Another bad week for Bitcoin could be a precursor of more pain to come, according to strategists watching the bitcoin selloffs in cryptocurrencies.

Further weakness in the price may bring the $20,000 zone into view as a downside target according to Oanda Corp. Evercore ISI and Tallbacken Capital Advisors LLC. Bitcoin fell about 2% to $33,000 in Hong Kong on 11:23 a.m. and is down some 10% so far in June.

The largest cryptocurrency is "nahting down the $30,000 level" amid growing regulatory fears in the U.S. and a break of $30,000 could see a tremendous amount of momentum selling, said Edward Moya, senior market analyst at Oanda Corp.

The Bitcoin computer and cryptocurrency has fallen from its April record slightly diluted over a dispute with billionaire Elon Musk over the energy it needs as well as a renewed regulation crackdown in China. The ability of the U.S. authorities to recover a high-profile Bitcoin ransom has also denied the idea that it goes beyond government control, which has been an article of faith for some of the coin supporters.

Evercore technical strategist Michael Purves and Tallbacken Capital Advisors founder Rich Ross recently announced the $20,000 area as a potential key level if Bitcoin breaks lower than where it is now.

However, others remain confident in the long term outlook. For instance, Michael Saylor's MicroStrategy Inc. boosted a junk bond sale to $500 million from $400 million to fund the purchase of more Bitcoins. MicroStrategy emerged as one of the most bullish companies to buy cryptocurrencies.

About a week after Bitcoin's all-time high from mid-April, Purves had argued that the bullish case had 'highly challenged.

What much lower can it go? Purves asked in his note Wednesday. The easiest answer continues to be a complete retracement of the breakout from $20,000, in other words, back to $20,000.

More stories like this are available on bloomberg.com.

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