The Latest on Bitcoin: A Fourth Consecutive Selloff
Bitcoin has taken a hit for the fourth consecutive trading session, amidst a broader sell-off in the cryptocurrency market that contrasts with recent record highs in global stocks. The digital asset dropped by as much as 8.1% to reach its lowest point since February, trading at around $54,190 as of 12:21 p.m. Friday in Singapore. Smaller coins like Ether, XRP, and Cardano also experienced significant losses, with some seeing declines of over 10%.
Crypto speculators are currently facing a range of challenges, including decreasing demand for US Bitcoin exchange-traded funds, indications that governments are selling seized tokens, and the uncertain impact of political changes in the US. Additionally, administrators of the bankrupt Mt Gox exchange are gradually returning a stash of Bitcoin to creditors, raising questions about the potential impact on the market. A Mt. Gox-related wallet moved $2.7 billion worth of the token on Friday, as reported by Arkham Intelligence.
While MSCI Inc’s global stocks gauge is near a record high, the short-term correlation between Bitcoin and the index is declining. This raises questions about whether the risk aversion seen in the crypto market is isolated or indicative of a more cautious quarter for mainstream investments following a strong first-half for shares.
Stefan von Haenisch, head of trading at OSL SG Pte, commented, “There’s just a general lack of buzz in crypto markets right now.” He emphasized the need for more dovish monetary policy signals from the Federal Reserve, suggesting that rate cuts and balance sheet expansion are key factors that the crypto market is anticipating.
Investors are eagerly awaiting US jobs data for the latest insights on Fed policy outlook. Recent soft economic reports have supported the case for potential monetary easing in the coming months.
After achieving an all-time high of $73,798 in March, fueled by strong demand for US ETFs, Bitcoin’s momentum has slowed down, affecting the rest of the digital asset market. Approvals for debut US ETFs for Ether are pending, but interest in these products may be mixed if the crypto sell-off persists.
Liquidations
Over $800 million worth of bullish crypto bets were liquidated in the past three days, marking one of the heaviest liquidation periods since April, according to Coinglass data. The weekend’s poor liquidity could exacerbate any market movements triggered by liquidations, as highlighted by Caroline Mauron, co-founder of Orbit Markets.
The operators of the energy-consuming computers that support the Bitcoin blockchain are still grappling with the financial impact of April’s halving, which reduced the new tokens they receive. Some Bitcoin miners are responding by selling some of their token inventory. Le Shi, head of trading at Auros, noted the critical $51,000-$52,000 range, as many miners are nearing their break-even point for profitable mining.
In conclusion, the crypto market is experiencing a challenging period, with Bitcoin’s decline affecting the broader digital asset landscape. As uncertainties loom and market participants await crucial data releases, the future trajectory of Bitcoin and other cryptocurrencies remains uncertain.
