Share this article
Bitcoin, Ether Now Down 50% From Last Month's ATH as Rout Resumes
Even if Huobi is the specific catalyst for today's plunge, it's just the latest negative news in the sector that has been battered in the last few weeks.
Updated Sep 14, 2021, 12:59 p.m. Published May 23, 2021, 5:38 p.m.
Make us preferred on Google
The sell-off in cryptocurrencies resumed Sunday afternoon ET with most major coins down plunging 20% to 30% or more in the last 24 hours. Bitcoin, the largest cryptocurrency by market value, is a bright spot only in comparison, being down a mere 16%. Both bitcoin and ether, the second-largest crypto that is down 15%, have now lost half their value from all-time highs set last month.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
In recent trading, the price of bitcoin was at $32,297.15, down 14.95%. Earlier in the afternoon it had reached as low as $31,179.69, all but wiping out year-to-date gains. At press time, ether was at $1868.79, down 17.8% after falling as low as $1,733.58. Even with today's drop, ether is still up 159% year-to-date.
According to Nick Mancini, analyst at crypto sentiment analytics platform Trade the Chain, the specific reason for today's bloodbath was news from crypto exchange Huobi, which said it's scaling back some of its offerings in some countries due to China's increasingly hard line on crypto.
"Right after the news broke, short-term bitcoin sentiment scores plummeted to levels not seen since May 19th, this was followed by a drop in price," Mancini wrote.
Read more: Huobi Scales Back Due to China Crackdown; Bitcoin Falls Below $32K, Ether Past $2K
The moves by Huobi are the first concrete steps by a crypto company in response to China's crackdown and it appears to be making the hard line much more real to investors.
Crypto crash
Even though Huobi was the specific catalyst for today's plunge, it's just the latest negative news in the sector that has been battered in the last few weeks. Fears of the crackdown on crypto in China, fears of coming regulation in the U.S. and Tesla turning its back on bitcoin have all pummeled the market.
New investors to crypto, attracted by the massive gains in the space earlier in the year, are now unnerved by a price graph that isn't constantly moving up and to the right, according to Joe DePasquale, CEO of BitBull Capital. Illustrating how the string of bad news has rattled new investors, the search query "Should I sell my bitcoin?" soared on Google over the past week, according to CryptoSlate.
Thus the Huobi announcement reached an audience already expecting the worst and the effect of that negativity was intensified by the usual low volume found on a weekend, producing a selloff of memorable proportions.
Going forward, several analysts said they see $30,000 as a strong support and, with a lot of liquidations out of the way, a possible recovery in the coming week.
Tesla's announcement on May 12 that it would no longer accept crypto as a form of payment due to environmental concerns helped set off the wave of selling that has gained strength with each new source of worry. In the process, all the gains in the price of bitcoin that Tesla helped fuel with its announcement on Feb. 8 that it had bought $1.5 billion in bitcoin for its balance sheet are now gone.
For those who enjoy a bit of schadenfreude, Tesla has been caught up in the snowball it helped create. According to a recent article in Fortune, Tesla likely bought its $1.5 billion in bitcoin at about $34,700 a piece. In the company's Q1, Tesla's bitcoin stash was the best performing part of the carmaker's business. Now, unless there is a recovery in the price of bitcoin between now and July 1, Tesla shareholders should brace themselves for an impairment in the company's Q2 earnings report.
That could help explain yesterday's somewhat pro-crypto comment by company CEO Elon Musk, who was responding to a tweet asking, "Yo Elon what do you think about the peeps who are angry at you because of crypto." Musk said, "The true battle is between fiat and crypto. On balance, I support the latter."
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
Circle’s biggest bear just threw in the towel, but warns the stock is still a crypto roller coaster
Circle’s rising correlation with ether and DeFi exposure drives the re-rating, despite valuation and competition concerns.
What to know:
- Compass Point’s Ed Engel upgraded Circle (CRCL) to Neutral from Sell and cut his price target to $60, arguing the stock now trades more as a proxy for crypto markets than as a standalone fintech.
- Engel notes that CRCL’s performance is increasingly tied to the ether and broader crypto cycles, with more than 75% of USDC supply used in DeFi or on exchanges, and the stock is still trading at a rich premium.
- Potential catalysts such as the CLARITY Act and tokenization of U.S. assets could support USDC growth, but Circle faces mounting competition from new stablecoins and bank-issued “deposit coins,” and its revenue may remain closely linked to speculative crypto activity for years.
Top Stories
