Crypto Carnage: Bitcoin Falls Under US$27,000 with Cardano as Biggest Loser

Bitcoin has experienced a sharp price decline, falling below US$27,000 for the first time in more than two weeks. The drop was triggered by a combination of factors, including regulatory uncertainty, market liquidity concerns, and speculation of government token transfers.

Multiple Factors Have Impacted the Crypto Market

Regulatory uncertainty has been a major challenge for the cryptocurrency industry, as different jurisdictions have different rules and approaches to digital assets. Some market makers, such as Jane Street Group and Jump Crypto, have scaled back their crypto activities globally due to the lack of clarity and consistency in regulation. This has reduced the liquidity and depth of the crypto market, making it more prone to volatility and price swings.

Market liquidity concerns have also been exacerbated by the recent sell-off in the crypto space, which has seen many investors exit their positions and take profits. The sell-off was partly driven by rising inflation expectations, which have increased the demand for safer assets and reduced the appetite for riskier ones.

Bitcoin, which is often seen as a hedge against inflation, has failed to live up to its reputation as a store of value in this environment.

Speculation of government token transfers has also added to the downward pressure on Bitcoin. Some traders have speculated that the US government is moving large amounts of Bitcoin, possibly seized from hackers or criminals, and may dump them onto the market.

This has created fear and uncertainty among investors, who worry that such a move could flood the market with excess supply and drive down prices.

Cardano’s Loss is Litecoin’s Gain

Bitcoin’s decline has also dragged down most other major cryptocurrencies, with Cardano being the worst performer among the top 10 non-stable coins. Despite a 2.05% increase in the past week, Cardano’s ADA token fell 3.13% in the last 24 hours and traded at US$0.3641.

On the other hand, Litecoin and Polygon were the only gainers among the top 10 non-stable coins. Litecoin’s LTC token rose 3.42% to US$92.41, posting weekly gains of 9.89%. Polygon’s Matic token edged up 0.08% to US$0.89, after gaining 1.44% in the last seven days.

The value of all cryptocurrencies fell 0.92% to US$1.13 trillion, and the total trading volume of crypto assets decreased 8.82% to US$31.77 billion in the past day. The crypto market is facing a critical moment, as it tries to recover from its recent slump and regain its momentum and confidence.