- Bitcoin has dropped below crucial support levels in a strong sell-off by correcting over 5 percent in the last 24 hours.
- The strong US regulatory action has created an atmosphere of uncertainty and the current banking crisis has led to a liquidity crunch.
The world’s largest cryptocurrency Bitcoin (BTC) has come under strong selling pressure dropping below crucial support levels. As of press time, the BTC price has dropped nearly 5 percent over the last 24 hours and is currently trading at $26,198 with a market cap of $507 billion.
This is for the first time since late March 2023 that the BTC price has dropped below $27,000. This correction in the Bitcoin price comes with the broader crypto market dropping below $1.1 trillion. The fall in the altcoin space is somewhat of a similar magnitude.
Ethereum (ETH) is very much following Bitcoin’s footsteps and is down by 4.67 percent in the last 24 hours slipping below the $1750 level. Other altcoins such as BNB Coin, Cardano (ADA), Solana (SOL), Polygon (MATIC), Polkadot (DOT), and others have been corrected by a similar magnitude.
The recent drop in the crypto space comes amid strong action by US regulators in recent times. Earlier this week, two of the biggest crypto market makers – Jane Street and Jump Crypto – reported their exit from the US market. Speaking on the development, David Wells, CEO of Enclave Markets said:
In general, we’re going to see much larger swings in price both ways since so many large market makers have significantly reduced providing. Larger market makers create more stability in prices due to the liquidity they provide. You’ll see more frequent gaps up and down since order books are thinner in general.
Bitcoin Network Activity And Recent Developments
In recent times, the Bitcoin network has faced heavy network activity led by Bitcoin Ordinals leading to strong congestion on the network. The demand for Bitcoin NFTs running on BRC20 standards has shot up significantly leading to a strong surge in the gas fee of the Bitcoin blockchain.
As a result of this, the BTC price has dropped by nearly 10 percent over the last week, which clearly marks a downward trend for the cryptocurrency. Also, amid the recent n=banking crisis in the US, two of the major crypto-friendly banks – Signature Bank and Silvergate Capital – have been out of business thereby leading to a major liquidity crunch in the market.
On the other hand, the US Securities and Exchange Commission (SEC) has been going hammer and tongs after crypto firms operating in the US. The securities regulator has also targeted some of the biggest crypto exchanges including Binance and Coinbase, over the violation of the federal securities laws.
As of now, on the downside, $25,200 is strong support before Bitcoin could enter further correction going ahead.
