Bitcoin misses $12k for third time in a month

Leading crypto falls 5 per cent in Wednesday trading

Bitcoin failed once again to sustain itself above the $12,000 benchmark on Wednesday, with the world’s leading crypto falling by more than $400 in an hour and a half.

Tuesday evening marked the third time in less than a month that BTC surpassed the $12k mark. Its latest stay proved more short-lived that seen two when the crypto rose to a fresh 2020 high just above $12,400.

Having reached $12,050 late Tuesday night Bitcoin waned. Between 11:00 and 12:30 GMT, it fell from $11,761 to $11,348.

An environment of runaway currency devaluation, economic uncertainty and multiple large stimulus bills have created the long-term environment for the crypto rally of recent months. However, both Tuesday’s surge and Wednesday’s correction can largely be attributed to movements in the US dollar.

Bitcoin is thought to have developed something of a negative correlation with the global reserve currency of late. With the greenback at its weakest point in two years against a basket of its fiat peers at the start of the weak, BTC benefited.

The dollar recovered from this position on Wednesday however, following upbeat data revealing that manufacturing activity in the world’s largest economy surged to nearly a two-year high in August. Bitcoin thus suffered a correction, as did gold.  

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Although only time will tell regarding this correlation, Bitcoin’s sudden fall occurred at the same time as the Seoul Newspaper reported that authorities had raided and supposedly seized Bithumb, the largest cryptocurrency exchange by trading volume in South Korea.

The move follows last week’s seizure of the third-largest exchange, Coinbit, and is the latest example of South Korean authorities clamping down on the crypto market before the introduction of new laws next year.

By late-afternoon trading, Bitcoin traded down 5.4 per cent at a 24-hour basis to $11,337.

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