Bitcoin has recorded its largest decline since the market turmoil that shook global financial systems in early August, marking a wider retreat in the cryptocurrency market, which also saw substantial falls in Ether, the second-largest digital asset, Bloomberg reports.
At one point, Bitcoin experienced a drop of more than 6%, marking the steepest decline since the plunge on August 5. The cryptocurrency later regained some ground and was trading at about $59,375 as of 6:17 a.m. in London. Ether followed suit, slipping more than 7% before partially recovering to around $2,478.
The recent pullback comes as major cryptocurrencies unwind the gains they achieved last week, following Federal Reserve Chair Jerome Powell’s clear signal that the central bank is poised to cut benchmark interest rates from levels not seen in more than two decades.
“We basically have a Fed put in play for many assets, which makes the weakening in Bitcoin below its 200-day moving average price a little bit concerning,”Market analyst Tony Sycamore from IG Australia Pty noted.
Investors are now closely watching the upcoming earnings report from Nvidia Corp., a key indicator for the artificial intelligence sector that has propelled global stocks to record highs. The results, expected later on Wednesday, could influence investor appetite for riskier assets, including Bitcoin, according to Sycamore.
This decline in Bitcoin’s value comes despite a continuous stream of inflows into US exchange-traded funds linked to the original cryptocurrency. However, concerns persist regarding potential sales of seized Bitcoin by the US government, which are adding to the market’s challenges.
Despite the recent volatility, Bitcoin has risen 42% this year, reaching an all-time high of $73,798 in March. However, the prolonged period below this peak has begun to raise questions about the sustainability of the rally and whether Bitcoin has further momentum left.
