As the end of September approaches, Bitcoin (CRYPTO: BTC), the dominant cryptocurrency, is on track to record its first quarterly drop for the year.
Having declined approximately 11% since June, Bitcoin’s present value stands near $26,970, according to Bloomberg.
The downturn follows a robust 83% ascent in the initial half of 2023, which acted as a recovery from a sharp 64% fall in 2022 amidst turbulence in the digital currency domain.
Bitcoin has been trading within a confined range for the latter half of Q2, influenced by global economic uncertainties.
Last week, the Federal Reserve opted to keep interest rates stable, hinting at an extended period of elevated rates, which can often deter investments in risk-prone assets.
“The Federal Reserve’s hawkish stance has heightened investor apprehension, leading to declines in both traditional and digital asset markets,” Hosam Mahmoud, a research analyst at CCData, told Bloomberg.
A recent CoinShares report highlighted that, in the nine weeks concluding in mid-September, investors pulled out nearly half a billion dollars from cryptocurrency ventures, with Bitcoin responsible for a staggering 85% of these withdrawals.
On the regulatory front, the US Securities and Exchange Commission recently postponed its verdict on Bitcoin ETF proposals from BlackRock Inc.. The decision came shortly after similar postponements of the Ark 21Shares and GlobalX ETF proposals.
Sharing his perspective, Peter Tchir, head of macro strategy at Brean Capital told Bloomberg, “Current investors got very excited about the possibility of a Bitcoin ETF spurring a new wave of demand. A few years ago, it would have helped a lot, as it was difficult to own crypto, but now it just isn’t that hard. It still hasn’t materialized and maybe there is some doubt that it ever will, at least in the near term.”
Despite the prevailing challenges, some Bitcoin proponents foresee a potential surge, drawing parallels with the rally earlier this year in response to regional banking crises.
“There are signs Bitcoin’s corrective phase is maturing,” Will Tamplin, senior analyst at Fairlead Strategies, told Bloomberg. “It has cleared the 50-day moving average and reflected improved momentum off the back of oversold conditions.”
Produced in association with Benzinga
