Bitcoin reverses rally to drop below $38,000 after Amazon quashes speculation about crypto payments

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Bitcoin reverses rally to drop below $38,000 after Amazon quashes speculation about crypto payments
Avishek Das/SOPA Images/LightRocket via Getty Images
  • Bitcoin fell below $38,000 on Tuesday after Amazon rejected talk it may be venturing into crypto.
  • The token surged above $40,000 on Monday after a report Amazon has specific plans to accept bitcoin as payment.
  • The online retailer said the report was "not true," but didn't deny it's exploring crypto developments.

Bitcoin's price tumbled below $38,000 on Tuesday, retreating from the previous day's gains after online retail giant Amazon quelled rumours that it plans to accept crypto payments for purchases on its platform.

The coin was trading around $37,180 as of 3:20 a.m. ET, 4% lower than the same time Monday, according to Coinmarketcap data. That brought its year-to-date gains to 28%. Bitcoin is still about 42% below its high of nearly $65,000 in mid-April.

Bitcoin had briefly broken above $40,000 on Monday, rising above that level for the first time in six weeks. The surge was driven by a combination of positive developments, which included an Amazon job posting that indicated its interest in digital currencies and a report the US e-commerce giant had been working since 2019 on plans to accept bitcoin payments by the end of 2021.

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That raised hopes among investors that cryptocurrencies could be more widely accepted as a means of payment, analysts said.

But Amazon rejected the report in an email to Insider on Tuesday. "Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true," a company spokesperson said.

At the same time, the company noted it is exploring developments in digital currencies and signaled its interest in using new payments technologies on its retail platform.

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"We're inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon. We believe the future will be built on new technologies that enable modern, fast, and inexpensive payments, and hope to bring that future to Amazon customers as soon as possible," the spokesperson said.

Bitcoin's slide was a reaction to the dashing of hopes that Amazon is issuing its own digital coin or going to accept tokens as payment, Jeffrey Halley, a senior market analyst at OANDA, said in a note.

"Despite today's retreat, the digital Dutch tulip is still holding onto most of its gains from yesterday," he said. "A move higher through the 100-day moving average will signal the next leg higher."

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Bitcoin still needs to recover the range high of about $42,000 for investors to be technically bullish, said Marcus Sotiriou, sales trader at UK-based digital asset broker GlobalBlock.

Read More: Kraken has paid out more than $100 million in staking rewards this year as traders staked nearly $5 billion on the crypto exchange to earn interest. The exchange's product chief explains what staking is, and shares 3 of the top-yielding tokens on its platform.

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