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Bitcoin
and other cryptocurrencies fell Tuesday as fears over the Curve decentralized finance platform rocked sentiment for digital assets, with key price levels at risk after recent declines.

The price of

Bitcoin
has dropped 1.5% over the past 24 hours to below $28,950, falling further from the psychologically important $30,000 level that has supported the largest crypto for much of the past few months. Bitcoin is now firmly below its 50-day moving average, which bodes ill for prices from a technical market perspective.

“The minor breakdown increases risk to next support at the rising 200-day moving average around $26,700,” said Katie Stockton, managing partner at technical research firm Fairlead Strategist. “A short-term bearish bias is appropriate.”

While the stock market has been on a tear, Bitcoin has lagged the

Dow Jones Industrial Average
and

S&P 500
in a historically stagnant period for digital assets. 

Prices are now under new pressure from the decentralized finance, or DeFi, corner of crypto —in particular the Curve platform and its CRV token, which has tumbled amid concerns that a pile of the crypto could be sold.

“The reason for the pressure is the collapse of Curve amid a possible liquidation of the position of the company’s founder, who pledged CRV to buy [Tether, the U.S. dollar-pegged stablecoin at the heart of crypto trading],” said Alex Kuptsikevich, an analyst at broker FxPro. “The story impacts the broader altcoin market and reduces confidence in the sector.”

The Curve chaos introduces short-term pressures for cryptos, but market participants remain upbeat as traders await a key catalyst: the approval or denial of new applications for spot Bitcoin exchange-traded funds (ETFs). 

BlackRock

(ticker: BLK) and other financial giants filed for spot Bitcoin ETFs in June, and whether or not the Securities and Exchange Commission waves through these applications—many have been unsuccessful in the past—looms large. Spot Bitcoin ETFs herald both institutional openness to crypto and the prospect of a renewed wave of retail investor interest in digital assets, which could support prices. 

“History provides some compelling precedents,” said Binji Pande, head of ecosystem growth at Optimism, an Ethereum scaling group. “The first gold ETF, launched in 2003, catalyzed a 350% surge in gold prices within seven years. This could provide a useful analogue for potential Bitcoin price trajectories.”

In the meantime, however, cryptos remain under pressure, with

Ether
—the second-largest token—losing 2% to $1,820. Smaller cryptos, or altcoins, were similarly lower, with

Cardano
and

Polygon
both slipping 3%. It was more of the same for memecoins, with

Dogecoin
down 3% and

Shiba Inu
shedding 1%.

Write to Jack Denton at jack.denton@barrons.com