Bitcoin Price Falls Below $90K. Why a Crypto Recovery Might Not Come Soon. — Barrons.com
By George GloverBitcoin and other cryptocurrencies tumbled on Tuesday morning, extending a severe selloff that has brought the price of the world's largest crypto down nearly 30% from its recent highs. The selloff could get worse.Bitcoin dropped below $90,000 to $89,280 overnight, its lowest level since April 22 when it traded at $86,965. It is currently trading around $91,500.Bitcoin has fallen seven of the past eight days and is down 16.7% this month alone, on pace for its worst month since February when it fell 17.2%, according to Dow Jones Market Data. For the year, however, the crypto is down just 2%.Fairlead Strategies analysts wrote in a research note that $93,000 to $94,000 was likely "key support" for Bitcoin, meaning losses could accelerate now that it has broken below that level.Barron's itself set a near-term target of $85,000 for Bitcoin based on technical analysis.Ethereum dropped 4.3%, Solana slid 3%, and XRP fell 4.1% over the past 24 hours, according to data from the Kraken crypto exchange.There are a few factors dragging down digital assets, which are considered some of the riskiest assets. Wall Street has shunned cryptos and other risk assets like shares of artificial intelligence companies ahead of Nvidia's earnings due out on Wednesday. The chip maker's financial results and outlook might call into question — or reinforce — the enormous valuations handed to AI firms.Another factor, and a major one: Wall Street is worried the Federal Reserve won't cut interest rates next month. Traders are pricing in a 46% chance that the central bank lowers borrowing costs by a quarter of a point on Dec. 10, down from 67% a week ago, according to the CME FedWatch tool. When rates remain unchanged, investors tend to dump cryptos and other risk-on assets, as they are less appealing relative to interest-bearing investments such as bonds and savings accounts.And there is more uncertainty. Thursday's September nonfarm payrolls report could be a crunch moment for Bitcoin and its peers. If the figures signal the labor market has remained resilient, that would strengthen the case for the Fed to hold rates steady, which would likely drag down crypto prices further.Write to George Glover at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.