Bitcoin’s value has fallen by more than 5% over the latest seven-day period, leading to an even larger decline for the entire cryptocurrency of more than 2% in the final hours. According to reports, the average trading price of Bitcoin was around $62,267, and its value fell to its lowest level during this period. Despite this decline, trading activity witnessed an increase of 18% over the past day and reached approximately $20.7 billion.
This decline in the value of Bitcoin was accompanied by a 3% decline in the cryptocurrency market in the last day, with its total value amounting to approximately $2.31 trillion. It is not only Bitcoin that was affected, other major cryptocurrencies such as Ethereum, BNB, and XRP also suffered losses, resulting in the overall market sentiment turning neutral according to the Fear and Greed Index, which reached 57 points.
In terms of other major cryptocurrencies, Ethereum, the second largest cryptocurrency, saw a decline of more than 4%, and figures show that the prices of Ethereum and Solana have fallen by 10% and 28%, respectively, over the past 30 days.
Regarding exchange-traded funds (ETFs) linked to cryptocurrencies, their lack of guarantees for credit line facilities raised questions about their impact on digital asset markets, which increased pressure on selling.
Regarding US Bitcoin ETF demand, the report indicates a trend toward moderation, with progress in 2024 slowing to 47% compared to more than 70% in mid-March. Despite this, Australia is preparing to launch new exchange-traded fund operations.
Regarding financial flows, the influx of Bitcoin ETFs in the United States, estimated at $53 billion this year, confirms the growing acceptance of digital assets in the mainstream financial sector, and this trend is expected to be further supported by the launch of funds that invest… Directly into Bitcoin and Ether.
Cryptocurrency market decline and regulatory challenges
Within the past 24 hours, the cryptocurrency market suffered losses of 3.3%, as its value fell to a level of $2.3 trillion, a level that the market has not seen since April 19. What is worrying is the reversal of the downward trend that occurred last Wednesday, indicating the possibility of the market falling to lower levels.
Regarding Bitcoin, it continues its bearish development after failing to cross the 50-day moving average last Tuesday. With the current price approaching $62.267K, it is currently trading at the lower border of its trading range, suggesting a test of the $61K support level.
The ability to attract new buyers remains a catalyst for the cryptocurrency market, and is expected to exceed the current load of selling at the moment, including mining stocks. We are likely to see greater downside opportunities in the near future, with the price expected to fall to levels between $52-55,000 instead of continuing above $60,000.
Ethereum has been safe since its initial coin offering (ICO), and accused the network’s founders of fraud.
In terms of cryptocurrency competition, the competition between Bitcoin and Ethereum remains a focal point for traders and investors alike, as the market continues to navigate its complex patterns.
Cryptocurrencies in general are seeing regulatory challenges from all sides, and the latest attempts at regulation in Russia are an indication of the significant impact they could have on the cryptocurrency market. Experts’ opinions remain mixed regarding the nature of cryptocurrencies, as some consider them to be merely quasi-currencies that can be easily liquidated.
Advantages of Bitcoin as a safe haven and inflation-resistant asset
Bitcoin has unique advantages that make it one of the potential safe haven assets. It is a digital asset that is programmed to behave in a specific way. The Bitcoin algorithm carefully controls the amount of Bitcoin issued at one time, as well as the total amount of Bitcoin available over a lifetime. Its goal is to make the currency resistant to inflation.
The recent Bitcoin halving is further evidence of the success of this algorithm, as the rate of new Bitcoin issuance is halved. For example, Coinbase Global has assured its institutional clients that this makes Bitcoin an “inflation-proof software asset.” Bitcoin was effectively programmed to be a hedge against inflation.
Another unique feature of Bitcoin is that it was completely untethered to the traditional financial system even before the launch of the new spot Bitcoin ETFs. Bitcoin was created in response to the 2008 financial crisis, and major efforts were made to free it from the system of Wall Street brokers and central banks. Therefore, Bitcoin has not been highly connected to the broader financial markets during its existence.
This disconnect from the broader markets is exactly what makes Bitcoin so valuable in times of turmoil. While other assets fluctuate, the value of Bitcoin may also fluctuate. This sounds familiar, it’s exactly why people buy gold. If the value of their stock market investments falls, at least the value of their gold holdings rises. It is possible that the same is true for Bitcoin as well. For this reason, Bitcoin is sometimes referred to as “digital gold” or “the gold of the digital age.” In light of economic and political turmoil, many investors are turning to Bitcoin as a way to protect their investments and diversify their portfolios.
