The price of Bitcoin (BTC) has slumped below $40,000 for the first time in six weeks.
The slide took place near the close of the day on Tuesday, with BTC prices having drawn down by 16% from nearly $47,300 at the start of the day to tag a local low of $39,650 at roughly 9 pm UTC. The move marked a 25% retracement from BTC’s local highs above $50,000 on Sept. 7.
However, the pullback came after Bitcoin had gained more than 80% since hitting $29,300 on July 20 and then heading into early September’s highs. Bitcoin has since recovered to trade just above $42,000.
Bitcoin was not alone in suffering a sharp price decline on Tuesday, with 29 of the top 30 crypto assets by market capitalization suffering a 24-hour drawdown, according to CoinGecko.
Some of crypto’s outspoken critics have seized on the dip to offer apocalyptic predictions for the markets, with Mr. Whale proclaiming to his 300,000 Twitter followers that “the bear market is here.”
Notorious gold shill Peter Schiff chimed in, forecasting that the growth of altcoins will soon “overwhelm demand” until “the crypto bubble pops,” while Bitfinexed believes the credit woes of Chinese real estate giant Evergrande will threaten Tether’s reserves and the broader crypto markets through systemic risk.
The price plunge also came in the aftermath of United States Securities and Exchange Commission Chairman Gary Gensler likening stablecoins to poker chips and calling for tightening regulation of the sector.
However, much of Crypto Twitter reports zealous dip-buying in response to the market action, with some analysts asserting Bitcoin is poised for a recovery should prices hold above local support.
Galaxy Digital CEO Mike Novogratz appeared on CNBC, saying that he won’t be feeling “nervous” unless BTC fails to hold above $40,000 and Ether (ETH) crashes below $2,800. “As long as those [price levels] hold, I think the market’s in good shape,” he added.
Novogratz is not alone in eying the roughly $40,000 level as a critical support zone for BTC, with popular analyst William Clemente III recently asserting that Bitcoin is unlikely to fall below $39,000 due to its liquid supply floor and “real-time scarcity.”
Looking toward the fourth quarter, influencer Lark Davis noted that the final quarter of both 2013 and 2017 saw rallies of more than 300% as past bull cycles crescendoed, and he speculated on how a possible approval of a Bitcoin exchange-traded fund in the U.S. could again send prices flying.