Crypto in free-fall: Bitcoin tanks 30% to $31,000, Ethereum loses 40%, Dogecoin down 45%

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Cryptocurrencies have landed in troubled waters. All popular digital currencies are witnessing steep drops with key technical levels in red.

Bitcoin, the most popular crytpocurrency in the world lost 30 per cent to $31,000, as its most popular proponent, Tesla CEO Elon Musk, backtracked. The rout wiped $500 billion from Bitcoin’s peak market value. The coin is now down more than 50 per cent from its record level of $65,000 posted in April. It has lost all the momentum it gained after Tesla announced in February its investment in the digital coin and agreed to accept payments for its cars and services in Bitcoin. As of now, while the EV maker has retained its Bitcoin holdings, it has stopped accepting Bitcoin payments, citing extensive use of fossil fuels in mining the currency.

As Bitcoin’s fortunes turned for the worse, other cryptocurrencies did not fare well either. Ethereum, the second-largest cryptocurrency in the world, is down 40 per cent, whereas Dogecoin, the meme crypto popularised by Musk, lost 45 per cent.

The downfall came after Tesla turned a cold shoulder to Bitcoin. Musk’s tweets announcing Tesla’s apprehensions towards the currency were followed by the selloff. An announcement from People’s Bank of China on Tuesday reiterating that digital currencies cannot be used for payments exacerbated the worsening sentiment.

Analysts observed that the several key technical indicators were flashing red. Ipek Ozkardeskaya, senior analyst at Swissquote in Gland, Switzerland told Bloomberg that the next important support level stands close to $37,000, then at the $30,000 mark. She further added that a pullback to these levels, and even below, was pobable, even in the short run.