(Bloomberg) – Bitcoin fell to a two-week low, with some analysts pointing to the recovery of the Colonial Pipeline Co. bailout as proof that cryptocurrencies are not out of government control.
The largest token plummeted 8.2% to $ 31,645 in New York trading. The Bloomberg Galaxy Crypto Index was down 12%, with altcoins like ethereum, litecoin and EOS seeing steeper declines.
The fact that investigators “could track down the untraceable and confiscate it could be undermining the libertarian case free from government control,” said Jeffrey Halley, senior market analyst at Oanda. The implications of this may have prompted the sale, he added.
The United States recovered almost the entire bitcoin ransom paid to the perpetrators of the Colonial cyberattack last month, in a sign that law enforcement agencies are capable of pursuing criminals online even when operating outside the country’s borders.
The FBI was able to find the ransom in Bitcoin by discovering the digital addresses the hackers used to transfer the funds, according to an eight-page seizure warrant released Monday by the Justice Department.
While the FBI’s ability to track and recover cryptocurrency may run counter to the anti-establishment spirit that led to the development of bitcoin, it can also be seen as a positive sign for the sector as it seeks greater acceptance.
Meanwhile, strategists are keeping an eye on Bitcoin’s key technical levels.
“The main price support is at the $ 30,000 level, and a drop below this level could halt and accelerate the sell-off in the short term,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Oanda’s Halley said a break below $ 30,000 could lead to “another capitulation.” Evercore ISI’s Rich Ross sees proof of support around $ 29,000.
Bitcoin is up 14% this year, but the token has tumbled from a high of nearly $ 65,000 in mid-April, overshadowing the cryptocurrency sector. The sell-off was exacerbated by billionaire Elon Musk’s public reproach for the amount of power used by the servers that support the token. China’s harsh regulatory oversight also worsened the perception.
The virtual currency, which has more than tripled in value over the past year, is now in a “cooling period” that could last “a few months” more, he said. Vijay Ayyar, Asia-Pacific director of crypto exchange Luno Pte.
Original Note: Bitcoin Extends Drop to Levels Last Seen in May’s Crypto Selloff
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