Many crypto investors are still struggling to explain the sudden plunge in digital assets this week. A look at technical indicators doesn’t paint a pretty picture going forward.

While Bitcoin is holding above the $8,000 level, a breach below would test its 200-day moving average support, which sits around $7,000. In addition, the GTI Global Strength Indicator -- a measure of upward and downward movements of successive closing prices -- shows the coin hasn’t dipped yet into oversold territory, which could portend further declines.

For weeks, all was calm in the crypto universe as traders awaited new regulatory developments. But cryptocurrencies sold off on Tuesday, with Bitcoin dropping below $9,000 for the first time in three months. On an intraday basis, Bitcoin’s 17% drop was its largest since January 2018. 

Bitcoin slipped Friday for a sixth session close to the $8,000 mark, in its longest losing streak in almost a year.

Most other peer coins, which were also hit on Tuesday, staged a comeback from the plunge. Ether gained as much as 6% while XRP rose about 4%.

As often happens in the cryptosphere, investors posed a variety of explanations for the plunge. To Ed Moya, senior market analyst at Oanda, it could be attributed to the tepid reception for Bitcoin futures contracts that settle in the digital currency. “The whole cryptocurrency market tumbled as the new federally regulated market for trading cryptos saw a very lackluster debut,” Moya wrote in a note.

A break below $9,000 may have caused investors to “bail out,” said Shawn Cruz, manager of trader strategy at TD Ameritrade. Alternatively, investors may have been moving into safer assets. “You had a massive rally in bonds yesterday at the same time. That could be behind that as well,” he said by phone.

Here are some additional views:

• Matt Maley, equity strategist at Miller Tabak + Co.: “The $9,100-$9,300 range was a key support for Bitcoin as it bounced off that level four times over the summer. Therefore, that range had become a very important support level. When it was broken, we probably saw some sell-stops elected and the whole thing began to snowball lower.”
• Mati Greenspan, senior market analyst at trading platform eToro: “There do seem to be several narratives surrounding this breakdown,” he wrote in a note. “Even though crypto is often touted as an uncorrelated asset class, there’s no denying the strong coincidence that the U.S. stock market took a hit just a short time before Bitcoin did.” He added, “In my mind, the main catalyst for last night’s crypto crash was due to the underwhelming Bakkt launch. People have been buying the rumor with high hopes for months and many have now sold the disappointing news.”