Bitcoin sinks again on recession fears

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Illumination of the stock graph is seen on the representations of virtual currency Bitcoin in this picture illustration taken on March 13, 2020. (Photo: Reuters)

Bitcoin resumed a fall on Wednesday, moving in tandem with weakening stocks amid mounting concerns about a global recession.

The largest cryptocurrency declined as much as 2.5% to US$20,316, holding right above the key $20,000 level. Ether also fell by a maximum 2.5% to $1,093.46. Shiba Inu, the 14th-biggest cryptocurrency by market cap, rallied 21% in the past 24 hours though its momentum was tailing off, according to pricing from CoinGecko.

“Bitcoin has made ‘a bottom’ but probably not ‘the bottom’,” said Mark Newton, head of technical strategy at Fundstrat Global Advisors. “Upside targets should materialise near $23,300 with a max near $24,800 before prices pull back to likely challenge lows into the final week of June.”

Cryptocurrencies have been moving for months in the same direction as stocks, and Wednesday’s moves were no exception as investor appetite for risk assets ebbed on growing fears about an economic downturn. Bitcoin appears to be consolidating around the $20,000 level, similar to its action around $30,000 for much of May and into June.