FXT Investments: Bitcoin Falls Below $26,000 for the First Time in Two Months

Beijing time on Friday morning, the cryptocurrency fell sharply, bitcoin short-term fell $1400, the lowest to $25,275/piece, the day's decline once expanded to 7%; Ethereum short-term plunged nearly $200, the day's decline once expanded to 10%, the lowest to $1538/piece, nearly one hour the whole network explosion volume soared to $650 million.

It was the first time in two months that the price of bitcoin fell below $26,000.

FXTAs global government bond yields climb to their highest level in about 15 years, risk aversion hangs over the cryptocurrency market。

"Given what is happening in the bond market, the bitcoin price could easily weaken," Edward Moya, a senior market analyst at Oanda, said in a note.

The fall in bitcoin's price has all but erased most of the gains since June 15, when BlackRock unexpectedly filed for a bitcoin ETF. After a 72% surge in Quarter 1, bitcoin has fallen about 9% since the end of March. Last year, bitcoin plunged 64% amid a series of industry scandals and bankruptcies.

Michael Safai, a partner at quantitative trading firm Dexterity Capital, said:

"There aren't enough good headlines in the cryptocurrency space to get people excited. Instead, rising interest rates and waning risk appetite are driving non-cryptocurrency traders to safer assets."

The rise in global bond yields comes as resilient economic data challenges the view that central bank rates are peaking. Higher rates typically make alternative investments such as cryptocurrencies less attractive.

The cryptocurrency had been trading in a narrow range for months before its fall. A measure of bitcoin price volatility has been trending downward, according to data compiled by foreign media.90-Day volatility reached its lowest level since 2016 this weekMeanwhile, according to research firm K33,Bitcoin's three-month implied volatility is 35%.For comparison, consider what happened in October 2020: after 47 days without a 5% fluctuation, the index hit a then-record low of 56.

The firm's Bendik Schei and Vetle Lunde wrote: "The market was silent throughout the summer of 2023, with implied volatility well below historic lows". It was an unusual period of calm, and over the years Bitcoin has attracted attention for its wild price swings. In the past, it was not unusual to see a 5% or 10% swing on one day, followed by a reversal on the next trading day. That is why its recent weakness has not gone unnoticed, and any other measure of volatility shows a similar listlessness.

Analysts at Glassnode said a number of bitcoin indicators showed extreme "apathy and exhaustion". One, the so-called upper and lower Bollinger Bands, is now only 2.9 per cent apart, having narrowed only twice before.

Shiliang Tang, the chief investment officer of cryptocurrency investment firm LedgerPrime, said:

"There was optimism earlier in the week that the grey release (Grayscale) bitcoin ETF solution would come out this week, but so far nothing has come of it. In addition, the weakness of traditional markets this week, the sell-off of the S & P 500 and technology stocks, the 10-year interest rate hitting a high, and the US dollar being sought after, all of which are not good for risk assets.