Bitcoin fell below $ 30,000 for the first time since July 2021

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Bitcoin fell below $ 30,000 on Tuesday, for the first time since July 2021, dropping from a record high in November to about 55% amid a global flight from riskier investments.

The world’s largest digital token fell as much as 3.9% to $ 29,764 in Asia before equalizing the slide. It was trading for $ 30,850 from 11:28 a.m. in Singapore. Ether, the second biggest token, has recovered enough to make a small profit. Other coins like Solana and Avalanche remained in the red.

“We are seeing a slowdown, partly because it is mostly a long-term sale” instead of leveraged liquidations, said Josh Lim, head of derivatives at New York-based Genesis Global Trading. “Now that some corporate treasuries are moving close to their cost base, markets are waiting to see if shareholders will be forced to reduce risk.”

Crypto unconsciousness is coming because tightening monetary policy to curb escaped inflation is holding back liquidity, discouraging investors from speculative assets.

Michael Novogratz, a billionaire cryptocurrency investor who runs Galaxy Digital Holdings Ltd., warned that he expects things to get worse before they get better.

“Crypto stores were probably correlated with Nasdaq until we reached a new balance,” Novogratz said in a Galaxy statement on earnings in the first quarter on Monday. “My instinct is that some more damage needs to be done, and that will be trading in a very volatile, volatile and difficult market for at least the next few quarters before people gain a sense that we are in balance.”

The crypto market also follows TerraUSD, an algorithmically stable coin that aims to maintain a one-on-one connection for the dollar. The connection seemed to have broken down, and the value of the token fell below 70 US cents on Tuesday, according to CoinGecko.

Do Kwon, the founder of Terraform Labs, which runs the Terra blockchain, is moving to strengthen stablecoin.

Luna Foundation Guard, an association created to support the decentralized token and the Terra blockchain, said it would issue loans worth about $ 1.5 billion in Bitcoin and TerraUSD to help strengthen TerraUSD’s binding.

Kwon caught the attention of the crypto world earlier this year by promising to buy as much as $ 10 billion in Bitcoin to support Terra.

‘I’m watching carefully’

“We are closely watching how the market develops over the next 24 hours,” Steven Goulden, senior research analyst at cryptocurrency maker Cumberland DRW, said in an email. “Including whether mechanisms being put in place to increase reliance, such as LFG lending Bitcoin to OTC trading companies, will be sufficient to sustain us in times of deep stress or if we need additional stabilization mechanisms.”

The fall of Bitcoin puts it in danger of falling firmly out of the range it traded in 2022, reversing the last race that brought the token to a record $ 69,000 in November.

With its 40-day correlation with the S&P 500 stock benchmark around the record, according to data collected by Bloomberg, any further blow to stock sentiment would also risk the withdrawal of Bitcoin.

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