Bitcoin has reached a fresh low for the past two months as global markets experience a sell-off. The leading cryptocurrency, Bitcoin, has broken out of its recent narrow trading range due to a prevailing risk-off sentiment affecting worldwide markets.
On the previous day, Bitcoin experienced a significant drop of 7.2%, marking its most substantial one-day decline since November 2022, a period that coincided with the collapse of the prominent exchange FTX. During Asian trading hours on Friday, it slipped further to touch a two-month nadir of $26,172. This value hasn't been seen since June 16. As of 0713 GMT, a partial recovery had taken place, with Bitcoin inching back up to $26,478, still reflecting a 0.6% decline for the day.
The global financial markets have been grappling with an intense selling spree. Wall Street's principal indices concluded on a lower note on Thursday, and Asian shares were on track for their third consecutive week of losses. These downturns stem from apprehensions regarding China's economic situation and concerns that the persistently strong U.S. economy could lead to a lengthier period of elevated U.S. interest rates.
Ether, the second-largest cryptocurrency, remained relatively stable at $1,690.20, despite also undergoing a notable drop on the preceding day.
Joseph Edwards, who serves as the head of research at Enigma Securities, attributed the downward movement in Bitcoin's price to two factors: dwindling volatility and a lack of enthusiasm from individual retail investors.
Bitcoin had been hovering in proximity to the $30,000 mark in recent times. It experienced an upswing in June when BlackRock expressed intentions to establish a spot Bitcoin exchange-traded fund (ETF) within the United States. Some investors perceived this move as a sign that the U.S. Securities and Exchange Commission might greenlight spot Bitcoin ETF applications submitted by various asset management entities, including Grayscale.
"The current significant concern revolves around the possibility that this development might be a precursor to the outcome of Grayscale's legal battle against the SEC. Optimism on this front has been a driving force in maintaining market levels above where they might naturally settle for much of the summer season," as per Edwards.