Bitcoin price is on the verge of a sharp slump on concerns that President Joe Biden will tighten cryptocurrency regulations
Bitcoin price has gone through two days of selling in a row, bringing the price below $ 30,000. Additionally, the ETH funding rate for the leveraged positions is cooling off after a very hot few weeks. At press time, BTC is trading around $ 29,671, down 15% over the past 24 hours.
BTC/USD 4-hour chart | Source: TradingView
Concerned about the US tightening supervision, Bitcoin price plunges to below $ 30,000
Bitcoin is on the second day of a major sell-off, with the world’s oldest cryptocurrency bottoming out on Thursday at $ 29,671. Bitcoin has risen somewhat since then, but bearish signals continue to emerge.
Rupert Douglas, head of sales at crypto custody service provider Koine, said this week’s drop in bitcoin happened a month after its new all-time high was much surpassed. times.
“It’s been up for quite some time. I think we are going to have a discount after the recent pump.”
The current all-time high for Bitcoin price, set on Jan. 8, is $ 41,962. In the weeks following that record – to Thursday’s lows – Bitcoin fell more than 26%.
Volatility for bitcoin is increasing. Data from late Wednesday shows Bitcoin’s 30-day volatility is trending up again. It was at 88.7% on January 20, a level not seen since April 2020 when COVID created uncertainty for all markets, including cryptocurrencies.
The pullback comes amid growing concerns that bitcoin is one of several financial market price bubbles.
Fears that U.S. President Joe Biden’s administration could attempt to regulate cryptocurrencies have also weighed on sentiment. During a Senate hearing on Tuesday Janet Yellen, Biden’s pick to head the U.S. Treasury expressed concerns that cryptocurrencies could be used to finance illegal activities.
The former chair of the U.S. Federal Reserve stated:
“I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels.”
Joseph Edwards of cryptocurrency broker Enigma Securities said these comments had a substantial impact.
“The action over the last 36 hours or so has largely been rippling outwards from the Janet Yellen comments on crypto. It was still unclear exactly what, if any, moves the Biden administration would take. We do think it’s probably still just a lapse in momentum rather than a sea change, though.”
The declines come amid signs that more institutional investors are taking steps to invest in the cryptocurrency.
BlackRock Inc, the world’s largest asset manager, plans to add bitcoin futures to the list of eligible investments for two of its funds, company filings Wednesday show.
Other asset managers are likely to follow in BlackRock’s footsteps and add exposure to bitcoin in their go-anywhere or macro strategies as the cryptocurrency market becomes more developed, said Todd Rosenbluth, director of mutual fund research at investment research firm CFRA.
“It’s easy to see how strong the performance has been of late and look at a historical asset allocation strategy that would have included a slice of crypto and how returns would have been enhanced as a result. Large institutional investors are going to be able to tap into the futures market in a way that a retail investor could not do.”
There are currently no U.S.-based exchange-traded funds that directly offer exposure to Bitcoin.
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