Bitcoin sinks to lowest since March after falling for a second straight day

BLOOMBERG

Bitcoin slid for a second day, at one point dropping to the lowest level in two months as the token unwinds some of its 2023 rebound.The largest digital asset fell as much as 3.2% and was trading at $26,320 as of 8:30 a.m. in London. Second-ranked Ether and a gauge of the top 100 tokens also declined, but XRP and Cardano bucked the downdraft.
A drop in liquidity, congestion on the Bitcoin blockchain and a US regulatory crackdown have sapped sentiment in the crypto sector. Bitcoin’s once strong correlation with stocks has all but disappeared, a possible sign of the diminished influence of macroeconomic drivers on digital assets compared with the rest of global markets.
“The recent bout of selling is to do with traditional finance institutions trying to offload their digital assets led by the regulatory crackdowns on crypto and the need to manage their balance sheets,” said Robert Alcorn, chief executive officer of Clearpool, a decentralised finance lending protocol.
Earlier it emerged that top market-making firms Jane Street Group and Jump Crypto are pulling back from trading digital assets in the US, while Jane Street is also scaling back its crypto ambitions globally.
Volumes have “fallen materially on exchanges and news of two large market makers exiting a number of exchanges has impacted sentiment,” said Richard Galvin, co-founder at fund manager Digital Asset Capital Management.
Recent market swings have been driven largely by “spot selling, with derivatives data still not showing extremity of sentiment or positioning,” he added.
Analysts are now scouring for the next levels of support for Bitcoin. Markus Thielen, head of research at Matrixport, said he’d be “cautious and short until Bitcoin prices drop back to $24,600.”