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Bitcoin drops 18%, El Salvador makes crypto legal tender

Crypto markets experienced a momentary tumble on Tuesday that resulted in some of the most popular digital-assets registering double-digit losses, until staging a mini recovery.

MarketWatch reported that at last check, Bitcoin was changing hands $46,964.65, down 9.1 per cent but had sunk to an intra-session 24-hour nadir at $42,921.27 on CoinDesk.

Ethereum, the number-two largest crypto by market value, was down 12 per cent at $3,461.97, but had hit a low at $3,036.30.

Strategists said there was no immediate catalysts for the sudden drop and its recovery, but investors also noted that Coinbase Global Inc., the United States’s largest cryptocurrency exchange, reported trading problems due to volume on its platform.

As of 1:40 p.m. Eastern Time, Coinbase reported that its technical problems had been resolved.

The turmoil in digital assets comes as El Salvador officially became the first country in the world to adopt Bitcoin as legal tender, allowing Salvadorans to do everything from buy goods and services to paying taxes.Fawad Razaqzada, market analyst at ThinkMarkets.com, reportedly said that the recovery in crypto coincided with a tweet from Salvadoran leader Nayib Bukele, who vowed to buy the decline in Bitcoin.

Razaqzada said Bitcoin’s struggle to stay above a price at $50,000, which some technical analysts view as a point of resistance, may provide some fodder for crypto skeptics and raise concern among digital-asset enthusiasts.

“Whether this will ignite fresh momentum buying remains to be seen. Bitcoin repeated failure to hold above $50,000 must be concerning some bullish investors,” the ThinkMarkets analyst was quoted as saying.

Stocks also were under some pressure on Tuesday, with the Dow Jones Industrial Average and the S&P 500 index trading lower, in the first trading session after the Labor Day holiday in the United States.

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