Shares of several cryptocurrency-related companies in Asian markets fell after Bitcoin led a sell-off in digital currencies.
Monex Group Inc., which owns the Japanese exchange Coincheck, and SBI Holdings Inc. fell over 2 percent to trade at two-week lows in Tokyo, while Vidente Co. and Omnitel Inc. retreated at least 6 percent in Seoul to lead declines among crypto-linked stocks.
Bitcoin, the largest cryptocurrency, plunged as much as 15 percent during U.S. trading hours, and traded at $5,544.37 as of 1 p.m. in Hong Kong, according to consolidated pricing data compiled by Bloomberg. Rival coins also retreated, as the industry braces for a contentious split in Bitcoin offshoot Bitcoin Cash.
“The $6,000 mark, which had been serving as a floor for a long time, gave way — this feels like a bit of a dangerous sign,” said Soichiro Tsutsumi, a trader with eWarrant Japan Securities K.K. in Tokyo. “Companies most impacted by the price move would be the ones with business models reliant on a client pool, on concern that the number of client accounts won’t expand.”
Bitcoin’s slump pushes prices into “deeply oversold” territory and suggests it may be due for a short-term rally, however longer-term technical indicators aren’t so favorable, according to Rob Sluymer with Fundstrat Global Advisors.
“This week’s breakdown produced significant technical damage,” Sluymer wrote in a note Wednesday. “That will likely take weeks, if not months, to repair to create a durable enough price ‘structure’ to support a multi-month rally.”
One stock bucking the trend was Ceres Inc., up 16 percent for its biggest gain since January after reporting nine-month earnings.
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