Bitcoin drops to $26,000 ahead of Fed chair speech

Bitcoin dropped 1.40 per cent during the past 24 hours to $26,081.21 and traded 2.90 per cent lower for the week, according to CoinMarketCap data

Bitcoin declined to near the $26,000 level Friday morning in Asia, giving up much of the previous day’s gains. Ahead of the U.S Federal Reserve Chair Jerome Powell’s Friday speech at Jackson Hole, investors are looking for indications of an end to the rate hike cycle, with fallouts for the crypto currency market. Ether dropped to near the $1,600 support level, while most other top non-stablecoin crypto currencies logged losses. Solana led the losers after its own day of gains Thursday.

Bitcoin dropped 1.40 per cent during the past 24 hours to $26,081.21 and traded 2.90 per cent lower for the week, according to CoinMarketCap data. Bitcoin hit a low of $25,914.93 on early Friday, a 2.9 per cent drop from its daily high of $26,688.48 on Thursday.

According to Samer Hasn, market analyst at Australia-based global multi-asset broker XS.com, the present caution in the crypto currency market is because of heightened regulatory actions in the U.S.

The U.S. SEC has brought lawsuits against several digital asset companies, including Ripple Labs, Binance.US and Coinbase. Luxembourg-based crypto exchange Bitstamp said Thursday it will halt Ether staking services for U.S. customers from September 25 amid recent regulatory developments.

Hasn said the negative sentiment may continue to put pressure on the crypto market in the coming weeks or months until a regulatory and legislative environment that regulates the crypto currency market becomes clear.

Hasn pointed to data from blockchain intelligence firm Santiment that shows Bitcoin whales moving large amounts of the token to their wallets as a further sign of a decline in market sentiment.

The comparatively huge movements in crypto wallets, led by Bitcoin, may continue to reduce the confidence of participants and fuel a state of caution about what may occur in the future in the market and lead to collapses or wide fluctuations, he said.

Greta Yuan, head of research at Hong Kong-based digital asset exchange VDX, said that investors have to recognize that “the bear market is not over yet.” With trading volume across the market still weak, the price of Bitcoin could stay in the range of $25,000-27,000 for some time, Yuan said.

Along with Bitcoin’s losses, Ether also slipped 1.40 per cent to $1,652.77 and was 3.27 per cent lower over the past seven days.

Most other top non-stablecoin crypto currencies traded lower over the past 24 hours. The exception was Binance’s BNB token, which rose  0.58 per cent to $217.48 but still logged a weekly loss of 1.87 per cent.