The bitcoin price plunged today to a nearly two-month low of nearly $26,000. The most famous cryptocurrency has been weakening for longer, with its price falling below $27,000 on Thursday and continuing its decline today. The cryptocurrency market faces several challenges, such as low liquidity or regulatory intervention in the United States. However, the mood is also influenced by macroeconomics, CNBC reported.
Shortly after 13:00 CET, bitcoin depreciated about four percent in the past 24 hours to around $26,377, according to specialist server CoinDesk. In early European trading, the cryptocurrency fell as low as $26,150, the lowest since March 17. The second largest cryptocurrency, ether, lost over three percent to roughly 1,767 dollars.
The value of Bitcoin has increased by about 59 percent since the beginning of the year. However, the price is subject to strong fluctuations exacerbated by low liquidity.
There has been a “remarkable decline in market depth” for Bitcoin, noted analyst Clara Medalie of Kaiko. Market depth refers to the market’s ability to absorb large buy and sell orders. If the market depth is low, relatively small orders can cause significant price movement to either side.
According to Bloomberg, Jane Street, and Jump Crypto will withdraw from cryptocurrency trading in the United States due to increasing pressure from regulators. Both firms provided funds to buyers and sellers and were among the leading market makers. This could worsen the liquidity situation.
Liquidity has been a big issue for the cryptocurrency markets since the closure of Silvergate and Signature Bank. These were the two key platforms that people used to make purchases in the cryptocurrency market.