Bitcoin witnessed a slight decline on Thursday, grappling with ongoing pressure stemming from fears of heightened U.S. interest rates and intensified regulatory scrutiny aimed at major players in the crypto sphere.
The cryptocurrency once again hovered towards the lower end of its trading range observed over the past two months, with its late-April dip to $57,000 marking its entry into a bear market following record highs in early March.
Over the past 24 hours, Bitcoin slid by 0.73%, reaching $62,119 by 13:56 ET (18:56 GMT). Additionally, the market felt the impact of sustained outflows from cryptocurrency investment products, particularly spot Bitcoin exchange-traded funds.
Regulatory apprehensions persist as concerns over increased scrutiny from U.S. regulators linger. Robinhood Markets Inc (NASDAQ:HOOD) disclosed regulatory action from the Securities and Exchange Commission (SEC) over crypto token trading on its platform, adding to the ongoing cases involving exchange Coinbase Global Inc (NASDAQ:COIN) and XRP issuer Ripple. These cases are expected to shape the legal framework surrounding cryptocurrencies in the United States.
Furthermore, the SEC‘s reported investigation into Ethereum’s classification as a security has led to a postponement in approving spot Ethereum ETFs. This uncertainty may continue until the investigation concludes.
In a recent report, it was alleged that over 90% of transactions in stablecoins were artificial, sparking concerns of heightened regulatory scrutiny on a sector integral to the crypto industry’s foundation.
Amidst a corrective phase in the crypto market, upcoming supply events worth billions pose potential challenges to a significant recovery. Nearly $2 billion worth of token unlocks scheduled over the next ten weeks, according to 10x Research, could exert downward pressure on the altcoin market. These unlocks often increase supply by releasing assets previously held in vesting contracts to team members, organizations, and early investors.
In addition, over $11 billion in Bitcoin is expected to be distributed to creditors of Gemini’s Earn program and the now-defunct Mt. Gox crypto marketplace.
Traders also remained cautious due to warnings from several Federal Reserve officials indicating a likelihood of prolonged high U.S. interest rates in 2024. This sentiment, coupled with anticipation surrounding key U.S. inflation data due next week, kept the market largely tethered to the dollar, posing challenges for risk-heavy crypto assets.
Beyond Bitcoin, other major cryptocurrencies saw minimal movement on Thursday, with Ethereum falling 0.2%, Solana gaining 0.22%, and XRP declining 2%.
Market participants are now closely monitoring upcoming comments from additional Fed speakers and key economic data releases for further insights into market direction.
