Bitcoin (BTC) has dragged the broader digital currency ecosystem into a bear zone after dropping to a price of $26,710.42, atop a 2.04 percent loss in the past 24 hours. The current outlook in the price of Bitcoin has shown the propensity for market participants to follow whatever trend the broader stock market is trailing in the short term.
Bitcoin started the week with very mild volatility and the price traded well above the $27,000 resistance level on Monday and Tuesday before breaching the flipping the trend overnight. Per the current twist in the price of the biggest cryptocurrency, investors are now more curious as to whether or not the coin is closer to hitting $30,000 or receding back to $25,000.
There are a number of factors that will determine the direction of this price movement. The current economic outlook in the United States as the country is on the brink of its first debt default in history has continued to rattle the markets. With no one certain as to what the impact of the default will be, investors have generally been avoiding risk assets, particularly those that are as volatile as Bitcoin.
With the uncertainty around, the market has largely sustained its sideways movement, a trend the industry picked on with the broad implosions of key players in the past year. Experts have pointed out that liquidity is neither flowing into the industry through new investments nor investors taking out funds.
“After the market tumult of 2022, sideways movement has felt a lot better than downward movement,” Tim Frost, CEO of digital wealth platform Yield App, said in an emailed statement sent to CoinDesk.