The cryptocurrency market saw significant fluctuations last week owing to macroeconomic uncertainty and the US debt ceiling crisis. In the last seven days, Bitcoin has gained 1.73 per cent but it saw a low of $26,016 as well as a high of $27,624 during the week. On Friday, it was trading at $26,813.29, according to data from coinmarketcap.
The total market cap touched $1.09 trillion on May 13 but rose to $1.14 trillion on May 15. On Friday, it was $1.12 trillion.
"The week began with Bitcoin trading at around $27,000, as uncertainties within the industry and macroeconomic factors weighed on investor sentiment. However, over the past three days, Bitcoin has faced downward pressure, resulting in an 8 per cent decline in value month-to-date," said Alankar Saxena, co-founder and chief technology officer (CTO) of crypto platform Mudrex.
"Currently, Bitcoin's price is undergoing a reversal, dropping from its recent peak of $27,400 to the $26,700 level. This decline can be attributed to investor concerns surrounding ongoing debt ceiling discussions in Washington DC, and regulatory developments. The uncertainty surrounding these factors might have contributed to the market's volatility and influenced the downward movement in Bitcoin's price," he added.
The research team of crypto trading platform CoinDCX said that the Bitcoin options expiry on Friday is crucial for Bitcoin's price, given the concerns about regulations and the US debt ceiling. On Friday, 29,000 Bitcoin options will expire.
"Bears in the Bitcoin market may take advantage of this uncertain climate. The outcome of the expiry will determine Bitcoin's short-term performance, with potential effects on its price," they told Business Standard.
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However, notably, despite this dip, Bitcoin has recorded long-term growth, with a 61 per cent increase in value year-to-date (YTD).
When the market is turbulent, one digital token XRP has shown impressive growth. In the last seven days, it has gained 8 per cent and was trading at $0.046.
"XRP is launching a platform for central bank digital currencies, enabling central banks, governments, and financial institutions to issue their unique forms of digital currency," said Parth Chaturvedi, investments lead at CoinSwitch Ventures.
In the coming days, the stability is the crypto market will depend upon the progress in the US debt ceiling talks, experts said.
