The price of Bitcoin has lost more than 10% over the past week and is currently trading at just over $44,000 U.S. as the broader cryptocurrency market experiences a pullback.
Fellow cryptocurrency Ethereum has slumped as much as 6.5% to $3,200 U.S., while the Galaxy Crypto Index that tracks all cryptocurrencies has slumped 6% overall.
Analysts looking at Bitcoin’s technical levels see a potentially volatile period ahead as the coin bumps up against two major support levels: the 50-day and 200-day moving averages. A sustained breach of both could potentially send prices down to around $40,000 U.S.
Bitcoin’s price experienced a sharp drop last week after El Salvador adopted the digital asset as legal tender. It fell as much as 17% in one trading day before recovering somewhat.
In addition, it’s a seasonally challenging period for the digital coin -- in the past decade, September has been the only month when Bitcoin has failed to deliver positive returns. Bitcoin fell during September in six of the previous 10 years, losing more than 6% on average.
El Salvador became the first country to adopt Bitcoin as legal tender, a development many cryptocurrency bulls see as potentially leading to greater adoption and mainstream acceptance.
Both cryptocurrency enthusiasts and detractors are monitoring El Salvador’s experiment to see if a significant number of people want to transact with Bitcoin when it circulates alongside the U.S. dollar, and whether it brings any benefits to the country.
