On Friday, Bitcoin reached its lowest price since the middle of March as volatility in the cryptocurrency market, brought on by low liquidity, persisted.
After falling below the $27,000 threshold on Thursday, the price of bitcoin was $26,312.23 at roughly 5:09 a.m. ET, according to statistics from CoinDesk. Its current level is the lowest since March 17.
The market value of Ether, the second-largest cryptocurrency, decreased on Friday.
Crypto markets are now dealing with a variety of problems, including as insufficient liquidity, a crackdown on the sector by American officials, and macroeconomic concerns.
Although the price of bitcoin has increased by over 59% this year, it has remained unstable due to insufficient liquidity, which makes price swings more pronounced.
The “notable drop in market depth” for bitcoin, according to Clara Medalie, director of research at Kaiko, has occurred.
The term “market depth” describes a market’s capacity to accommodate reasonably sizable buy and sell orders. When market depth is limited, very modest orders might result in a significant up- or down-move in the price of an item.
Additionally, according to Bloomberg, two of the largest crypto market makers, Jane Street and Jump Crypto, may withdraw from U.S. crypto trading as the country’s regulators continue to crack down on the fledgling industry. This might make the liquidity problem worse.
Since the failure of the cryptocurrency exchange FTX last year, U.S officials’ scrutiny of the digital currency market has increased.
In March, the U.S. Securities and Exchange Commission issued a warning to Coinbase for possible securities law breaches. Brian Armstrong, the CEO of Coinbase, stated that the business is geared up for a protracted legal battle with the SEC.
Meanwhile, Binance, a cryptocurrency exchange, was accused of breaking trade regulations by the Commodity Futures and trade Commission in March.
The cryptocurrency business is at odds with U.S regulators, claiming that the SEC and the U.S government have not established clear guidelines.