A brief late-morning rally was as good as it got for the crypto community on Tuesday.
After popping into positive territory the price of a single bitcoin,
the world’s largest cryptocurrency, did an abrupt U-turn, tumbling to a fresh 13-month low below $4,100, down nearly 15% since 5 p.m. Eastern Time on the Kraken crypto exchange.
Bitcoin traded to an intraday low of $4,067.10, its lowest level since Sept. 27, 2017.
The total value of all cryptocurrencies has slumped to a more than one-year nadir beneath $150 billion, according to data from CoinMarketCap.
Justice Department investigating Bitfinex and Tether: report
The Justice Department has intensified its probe into crypto exchange Bitfinex and Tether, a prominent stablecoin, which some allege is artificially inflating bitcoin values, according to reports, including one from Bloomberg.
The report comes after a University of Texas study linked issuance of Tether with increases in the price of bitcoin. In fact, this morning, a prominent Bitfinex skeptic Twitter user noted that the price of bitcoin jumped after an injection of $50 million worth of Tether.
Just another fucking coincidence, I’m sure. Within minutes of Tether re-injecting $50 million dollars worth of Tethers, the market magically turns around.
It’s just a coincidence. I’m sure everything is fine. pic.twitter.com/mfMfscnVWy
— Bitfinex’ed (@Bitfinexed) November 20, 2018
Bloomberg had previously reported that the Commodity Futures Trading Commission was investigating both Tether and Bitfinex and had requested documents and material from the entities.
What are the analysts saying?
Despite psychological support at the $6,000 level holding for a prolonged period, the lack of a bounce should have been a red flag for bitcoin bulls, one analyst said.
“Enthusiasts may have looked at bitcoin’s ability to hold above $6,000 as a sign of a market bottoming, but the warning signs were there each time it failed to make a new high on a rebound—most notably in March, May, July and even September,” wrote Craig Erlam, senior market analyst at Oanda.
“It’s always difficult to say where the market could stabilize again in such a wild market, but $3,000 looks an interesting level. This time last year, the sky was the limit for bitcoin and all the altcoins that piggybacked a ride, this year the ground below is looking very unsteady,” he wrote.
Ether surrenders second spot in digital asset ranks
Altcoins, those more than 2,000 coins other than bitcoin, are mostly lower on Tuesday. Ether,
which has slipped to third on the list of largest digital assets by total value, is down 8.5% at $134.99, Litecoin
was down 7% at $35.14, XRP,
had lost 9.4% to 44 cents and Bitcoin Cash was bucking the trend, trading up 2.1% to $263.30.
Bitcoin futures finished Tuesday well in the red. The Cboe Global Markets December contract
ended the day down 9.2% at $4,365 and the CME Group November contract
finished Tuesday down 12.3% at $4,240.
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