Bitcoin steadies after dropping below $26,000

Experts say disappointment from the stalemate on U.S. Bitcoin ETF applications has impacted sentiment

Bitcoin steadied Tuesday morning after falling below the key $26,000 support level overnight. Ether also declined but held the $1,600 mark. All other leading non-stablecoin crypto currencies traded flat to lower, with Polygon’s Matic leading the losers. Alternative asset manager CoinShares reported a $55 million outflow in digital asset investment products last week. Experts say disappointment from the impasse on U.S. Bitcoin exchange-traded fund applications has affected sentiment.

Bitcoin slipped 0.10 per cent during the past 24 hours to $26,133.35, extending its weekly loss of 11.12 per cent, according to CoinMarketCap data. The token declined to $25,846.09 just after midnight, but rallied to regain $26,000 later.

As the beginning of the week turned positive for traditional markets, crypto markets appear to — for now — be back in stagnation mode, said Justin d’Anethan, head of Asia-Pacific business development at Keyrock.

Many investors were understandably spooked by last week’s rapid increase in volatility and the ensuing price decline, which now means that a positive mood will only be just sufficient to keep crypto markets where they are, he said.

For some experts, last week’s rapid drop in Bitcoin price is a correction for price increases since June due to ETF hype in the U.S.

The recent tumult led Bitcoin price to trading levels that reflect the ones preceding the Blackrock filing for their Bitcoin Spot exchange-traded fund, stated Matteo Greco, research analyst at Fineqia International.

The fear-of-missing-out (FOMO) which lasted a few weeks following the filing appears to be now disappeared, waiting for news on the matter, Greco said.

Low liquidity in the crypto market also contributed to last week’s decline. Limited trading volume is driving market makers — which typically sop up sudden swings in supply and demand and help provide a more predictable trading environment — to wind down their activities and wait for a better time to fully restart operations.

Along with Bitcoin, Ether declined 0.84 per cent to $1,667.73 and dropped 9.55 per cent for the past seven days.

All other top non-stablecoin crypto currencies traded lower over the past 24 hours. Polygon’s Matic token led the decliners. It declined 3.53 per cent to $0.5589 for a weekly loss of 17.81 per cent.