Bitcoin and other cryptocurrencies have experienced a decline in prices, with regulatory pressures impacting market sentiment. Despite this, many crypto traders continue to maintain a bullish outlook. However, their optimism and large bets on a rebound might only serve to negatively affect prices in the short-term. Over the past day, Bitcoin’s price has dropped by 3% to $28,000, moving further away from the crucial $30,000 mark, which it surpassed for the first time in ten months just last week.
FxPro analyst Alex Kuptsikevich suggests that it might be prudent to prepare for a more typical pullback to the 50-day average, near $26,700. He warns that such a drop could test the resolve of crypto enthusiasts and that a break below this level could quickly push the price down to $25,600 – the vital 200-week moving average which enabled the bull market to regain momentum in March.
Bitcoin Struggles Amid Stock Market Weakness and Regulatory Concerns
Although Bitcoin’s decline this week corresponds with some stock market weakness, it has underperformed compared to the Dow Jones Industrial Average and the S&P 500. This underperformance is mainly due to concerns surrounding the regulatory landscape in the crucial US market. Crypto exchange Coinbase Global (ticker: COIN) has indicated that it is increasingly looking overseas, as the lack of regulatory clarity in the US could harm the company.
Bitbank analyst Yuya Hasegawa observes that despite the downturn, bullish traders have not yet abandoned hope. The positive Bitcoin futures market funding rate could limit the cryptocurrency’s upward potential and exacerbate its short-term drawdown.
Altcoins and Memecoins Follow Bitcoin’s Decline
As Bitcoin faces challenges, Ether, the second-largest cryptocurrency, has also experienced a 2% drop, falling below $1,925. Smaller cryptocurrencies, or altcoins, have shown similar weakness, with Cardano down 3% and Polygon plunging 4%. Memecoins have not been immune to this trend, with Dogecoin declining by 8% and Shiba Inu losing 3% in value.
This article is adapted from an original piece by Jack Denton at Barrons.com, which is operated by Dow Jones & Co. Barron’s is published independently from Dow Jones Newswires and The Wall Street Journal.
