Bitcoin fell to a two-week low, and analysts pointed out that technical failures and the restoration of Colonial Pipeline Co.’s ransom payment proved that cryptocurrencies were not beyond government control.

The largest token fell 9.9% to $31,036 in New York trading. The broader Bloomberg Galaxy Crypto Index fell 15%, while altcoins such as Ethereum, Litecoin, and EOS fell even more.

Jeffrey Halley, Oanda’s senior market analyst, stated that investigators “can track untraceable things and catch them, which could undermine liberal, government-controlled cases.” He said this may have triggered a sell-off.

The U.S. recovered almost all the bitcoin ransoms paid to the perpetrators of cyberattacks on the colony last month, which shows that law enforcement has the ability to hunt down online criminals, even if they are operating abroad.

According to an eight-page seizure order issued by the Justice Department on Monday, the FBI was able to find bitcoins by discovering the digital addresses used by hackers to transfer funds.

Although the FBI’s ability to track and recover cryptocurrencies may run counter to the anti-establishment spirit that led to the development of Bitcoin, it can also be seen as a positive signal for the industry as it is seeking wider mainstream acceptance.

For Mike McGlone of Bloomberg Industry Research, Tuesday’s drop was “related to concerns about the Fed’s confiscation of people’s Bitcoin,” he said. At the same time, “We have been in the down phase for a month, and this is part of it. This is the continuation of the latest downtrend, this is the latest spark. I thought Bitcoin will rise today due to colonial news, so I am confused. .”

At the same time, strategists are also paying attention to the key technical level of cryptocurrencies.

If Bitcoin does not continue to make higher lows, it may retest the $30,000, which it briefly touched during a brutal sell-off last month. If the token breaks through this integer level, another wave of selling may occur due to the lack of technical support between US$20,000 and US$30,000. However, Bitcoin’s 14-day Relative Strength Index (RSI) is close to the oversold level, currently at 32, indicating that the coin may ease somewhat.

Tallbacken CEO Michael Purves stated that if the token continues to fall and the $31,000 and $30,000 are withdrawn, it may retrace the entire break from $20,000 and fall back to that level. He wrote in a report: “This type of’round trip’ is not uncommon for assets (or stocks) that rebounded exponentially,” he added that something similar happened after the 2017 rebound. .

Other market observers agree. Ipek Ozkardeskaya, a senior analyst at Swissquote, said: “The main price support is at the $30,000 level. A break below this handle may encounter a stop loss and accelerate the selling in the short term.”

Oanda’s Halley also stated that a drop below $30,000 could lead to “surrender again.” Rich Ross of Evercore ISI is expected to test the support around $29,000.

Bitcoin is still up 9% this year, but the token has plummeted from its peak of nearly $65,000 in mid-April, casting a shadow over the cryptocurrency industry. Billionaire Elon Musk publicly condemned the amount of energy used by the servers supporting the token, which has exacerbated the recent sell-off. Strict Chinese regulation has also worsened market sentiment.

Dan Russo, portfolio manager of Potomac Fund Management, said: “Bitcoin has risen in price, but it has not risen in a straight line.” “This is expected-in its short history, you have seen these sharp shrinkages. . It just stretches upwards and starts to roll.”

Vijay Ayyar, head of the Asia-Pacific region of Luno Pte, a cryptocurrency exchange, said that this virtual currency-which has more than tripled in the past year-is now in a “cooling-off period” that may last for “a few months.”

(Update prices from start to finish, add technical analysis, add comments from McGlone, Purchases, Russo)

-With the assistance of Anchalee Worrachate, Claire Ballentine, Kenneth Sexton and Joanna Ossinger.