Bitcoin and other cryptocurrencies experienced further declines on Thursday, marking the sixth consecutive day of losses. This comes despite a general upward trend seen in other high-risk assets, as the recent bullish momentum in the crypto market fizzles out and prices return to familiar trading ranges.
The price of Bitcoin has dropped by 1.5% in the past 24 hours, falling below $26,750. This represents the lowest level for the largest digital asset so far this month, following a retreat from levels near $28,000, which were reached just last weekend.
Returning to the $26,000 zone is a discouraging setback for Bitcoin, as it spent over a month stagnating within this range due to low volatility and trading volumes that caused investor interest to dwindle. There were hopes of a new bullish streak when Bitcoin rallied in late September, reaching around $28,500 and bringing the psychologically important $30,000 level into sight.
Interestingly, Bitcoin has been moving in opposition to the stock market, which recently witnessed four consecutive days of gains for the Dow Jones Industrial Average and S&P 500. Some analysts suggest that crypto traders are adopting a more conservative approach due to concerns over fresh conflicts in the Middle East, which could potentially dampen demand for high-risk assets. On the other hand, it could simply be that Bitcoin has become uneventful once again.
The release of US Consumer Price Index (CPI) inflation data on Thursday may serve as a catalyst for Bitcoin to surpass $27,000 once more. However, it could also solidify its position around the $26,000 level since Bitcoin has shown limited response to recent macroeconomic developments. Although hopes of the Federal Reserve refraining from further interest rate hikes have boosted stock market sentiment this week, cryptocurrencies have not enjoyed the same support. Historically, higher borrowing costs tend to diminish demand for risky assets across the board.
Beyond Bitcoin, Ether, the second-largest cryptocurrency, also dropped by 1% to $1,550. Other smaller tokens or altcoins followed suit, with Cardano recording a slight decline of less than 1% and Polygon slipping by 2%. Even meme-inspired cryptocurrencies were not spared, as Dogecoin and Shiba Inu each experienced a decrease of approximately 1%.
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