London, 18 Aug, 2023 (GNP): The world’s leading cryptocurrency, bitcoin, experienced a significant drop to a fresh two-month low as global markets faced a wave of risk-off sentiment. Following a 7.2% decline on Thursday, marking its largest single-day drop since November 2022, bitcoin continued its downward trajectory.
The cryptocurrency reached a low of $26,172 during Asian trading hours on Friday, its lowest level since June 16. However, it showed a partial recovery to $26,441 by 0835 GMT, representing a 0.8% decrease for the day.
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As per sources, the global market downturn was evident as major indexes on Wall Street closed lower on Thursday, and Asian shares were poised for their third consecutive week of losses. Concerns about China’s economy and the anticipation of sustained higher U.S. interest rates, reflecting a robust economy, contributed to the prevailing risk-off mood.
Ether, the second-largest cryptocurrency by market capitalization, remained relatively stable at $1,685.20 after a sharp decline on Thursday, sources said.
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According to Joseph Edwards, Head of Research at Enigma Securities, the recent bitcoin price movement is attributed to low volatility and waning enthusiasm among retail investors.
In recent months, Bitcoin had been circling around $30,000. BlackRock’s application to introduce a spot bitcoin exchange-traded fund (ETF) in the US boosted the crypto markets in June. Some investors viewed the move as a sign that the U.S. Securities and Exchange Commission might accept proposals for spot bitcoin ETFs from different asset managers, including Grayscale.
Furthermore, Edwards noted, “The current concern is whether this price movement anticipates the outcome of Grayscale’s lawsuit against the SEC. Optimism surrounding this issue has largely contributed to market fluctuations throughout the summer.”