Bitcoin Slumps To Fresh Two-Month Low Amidst Escalating Risk Aversion
International markets have endured a pronounced bout of selling pressure, contributing to the closure of Wall Street's primary indices in negative territory.
In a marked departure from its recent tight trading range, the leading cryptocurrency bitcoin has plummeted to a new two-month low, mirroring the prevailing risk-off sentiment gripping global financial markets. On Thursday, bitcoin experienced a staggering 7.2 per cent decline, marking its most substantial single-day drop since November 2022, when the prominent exchange FTX faced a collapse. Continuing its downward trajectory, bitcoin reached a nadir of $26,172 during the Asian trading session on Friday. This figure stands as its lowest point since June 16. As the clock struck 07:13 GMT, the cryptocurrency exhibited a modest rebound to $26,478, translating to a 0.6 per cent decrease over the course of the day.
International markets have endured a pronounced bout of selling pressure, contributing to the closure of Wall Street's primary indices in negative territory on Thursday. Additionally, Asian shares have faced the prospect of a third consecutive week of losses, driven by concerns over China's economic outlook and apprehensions that US interest rates would remain elevated due to the enduring strength of the economy.
Ether, the second-largest cryptocurrency by market capitalisation, remained steady at $1,690.20, though it also underwent a sharp decline during Thursday's trading session.
Joseph Edwards, the Head of Research at Enigma Securities, attributed Bitcoin's downward spiral to subdued volatility and a lack of enthusiasm among retail investors.
Recent months had seen Bitcoin hovering close to the $30,000 mark. In June, the cryptocurrency experienced a boost when BlackRock submitted an application to introduce a spot bitcoin exchange-traded fund (ETF) in the United States. This manoeuvre led some investors to speculate that the US Securities and Exchange Commission might greenlight spot bitcoin ETF proposals from various asset management firms, including Grayscale.
"The prevailing concern at this juncture is that this drop could be anticipatory in nature, influenced by the impending outcome of Grayscale's legal dispute against the SEC. Optimism surrounding this matter has played a pivotal role in maintaining market optimism throughout much of the summer," Edwards commented, highlighting the prevailing uncertainty in the market.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
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