Bitcoin tumbles 10% amid China crackdown as death-cross formation hints freefall

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Bitcoin tumbles 10% amid China crackdown as death-cross formation hints freefall

On Monday, Bitcoin, the original crypto asset, had been hit with a hefty whiplash, tumbling to a two-week low as China had reportedly sharpened up an ongoing crackdown on bitcoin mining, while investors clamouring over the future of the digital asset remained fretted over further drawdown in Bitcoin’s valuation in a near term.

If truth is to be told, a number of retail traders seemingly were convinced lately over a bullish trend of the digital asset following a raft of upbeat remarks from institutional investors, surprisingly, a majority of them had reportedly shorted their bitcoin positions aimed at securing quick gains, inflicting deeper wounds into retail traders.

Besides, retail traders who had been clinging on to the crypto asset as a hedge against higher inflation, jumped on to the bandwagon of a mass-scale sell-off wave since last Wednesday, when the US Fed policymakers had voiced a hawkish tone in more than fifteen months and signalled at least two quarter-percentage point rate hikes by end-2023, as Bitcoin had shrugged off more than 20 per cent in last six sessions.

Nonetheless, Bitcoin, the most popular digital asset, has been up about 11 per cent year-to-date.

Bitcoin tumbles as death-cross formation jitters frets of further slide

Citing statistics, on Monday’s crypto market, bitcoin fell to a two-week low of $31.333, while the digital asset was last trading more than 10 per cent lower.

On top of that, a death-cross formation in bitcoin holdings, which usually indicates further declines, added to further strains on investors’ sentiment. A death-cross formation takes place when the number of traders shorting an asset overtakes those who had been clinging on to a long-buy trendline.