Asia crypto-linked stocks fall as bitcoin sinks

Downtrend: Bitcoin, the largest cryptocurrency, plunged as much as 15 during US trading hours, and traded at US5,544.37 as of 1 pm in Hong Kong. — Reuters

HONG KONG: 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% to trade at two-week lows in Tokyo, while Vidente Co and Omnitel Inc retreated at least 6% in Seoul to lead declines among crypto-linked stocks.

Bitcoin, the largest cryptocurrency, plunged as much as 15% during US trading hours, and traded at US$5,544.37 as of 1 pm 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 US$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 favourable, 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% for its biggest gain since January after reporting nine-month earnings. — Bloomberg

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