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Bitcoin’s Value Dips Below $26,000, Marking Its Most Challenging Week Since May

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Bitcoin's Value Dips Below $26,000, Marking Its Most Challenging Week Since May

Closing at $26,038.41, Bitcoin concluded the day with a decline of approximately 6%, as reported by Coin Metrics. The cryptocurrency exhibited fluctuations just above the $26,000 mark during the entirety of Friday, a continuation of the significant drop that commenced on late Thursday. This downward trend had a ripple effect across the broader cryptocurrency market, leading to a decrease in the values of other major coins. Ether and Binance coin experienced drops of around 4%, while Cardano’s ada faced a loss exceeding 3% on Friday. Ripple’s XRP encountered a notable slide of 13%, and the Solana token also suffered a setback of 7%.

Over the course of the week, Bitcoin concluded with an 11.28% decline, marking its seventh weekly loss out of the last eight and its most challenging performance since November. Coin Metrics employs a continuous measurement for crypto’s week, given its 24/7 trading cycle, spanning from the 4:00 p.m. ET market close on one Friday to the following week’s close. The cryptocurrency faced downward pressure throughout Thursday, with a particularly sharp drop occurring around 6 p.m. ET. This drop was triggered by a report in The Wall Street Journal, revealing that Elon Musk’s SpaceX had not only devalued its Bitcoin holdings by $373 million in the previous year, but had also sold off the cryptocurrency.

“The selling pressure seems primarily to have been driven by fear, stemming from reports of SpaceX divesting its Bitcoin holdings,” noted Darius Tabatabai, co-founder of the decentralized exchange Vertex Protocol. “Although no concrete evidence has substantiated this claim, the combination of reduced summer market activity and subsequent significant downward gaps in prices triggered a chain reaction of liquidations across derivatives markets. This phenomenon further intensified the decline, resembling the way we’ve observed market sell-offs unfold during periods of panic-driven selling.”

“At present, we’re observing adverse funding rates in perpetual futures contracts, a signal that could imply a bearish trajectory temporarily. However, considering the swiftness and intensity of this movement, the situation could swiftly reverse,” Tabatabai commented.

Bitcoin has largely remained stagnant throughout the third quarter, historically a period of weakness for the cryptocurrency. As of now, it has retreated by 14.25% for the quarter and approximately 10.69% for August. Despite the recent market softness even before the notable decline this week, Bitcoin’s overall performance in 2023 still reflects a gain of around 57%.

About Vijendra

Vijendra
Vijendra has a master’s degree in Marketing and editor with passion. Exploring economic policies of different economies and analyzing geo-politics policies is of keen interest. In his free time he is a hardcore metal-rock and punk music fanatic.

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