Bitcoin Drops Below $59,000 Amidst Inflation Concerns and Regulatory Actions
The cryptocurrency market experiences a downturn with Bitcoin leading the drop, influenced by inflation reports and regulatory actions against crypto firms.
Bitcoin Drops Below $59,000 Amidst Inflation Concerns and Regulatory Actions
Crypto prices have taken a hit this Thursday, with Bitcoin facing a notable decline of 4%. A recent inflation report has exerted pressure on the market, leading investors to worry.
Key Points:
- A rise in inflation for September pushed markets downward.
- The declines intensified after the SEC initiated legal action against digital asset market maker Cumberland DRW.
- According to Quinn Thompson from Lekker Capital, Bitcoin is expected to remain range-bound until the U.S. elections.
In recent U.S. trading, Bitcoin (BTC) has decreased about 4% within the last 24 hours, trading at approximately $59,000. This marks a significant drop, reminiscent of the U.S. Federal Reserve's unexpected interest rate cut in mid-September. Altcoins have seen better performance, with CoinDesk's crypto benchmark index declining just under 3%. Only Uniswap's UNI token showed gains amid news regarding the platform's own layer-2 plans.
The cryptocurrency market began the day weak after the Consumer Price Index report indicated an unanticipated rise in inflation in September. This news seemingly ended hopes for another 50 basis point cut from the Fed in November.
"The hot CPI and oil price surge due to Middle East tensions have caused fear that the Fed's rate cuts might not be as extensive as anticipated," stated Quinn Thompson in a Telegram message.
The liquidations of $147 million in leveraged long positions highlight the significant market move driven by investor fears. Additionally, the SEC's lawsuit against Cumberland DRW spurred further concerns regarding the regulatory hurdles facing crypto companies in the U.S.
Cumberland responded to the lawsuit, emphasizing that their operations would remain unchanged despite the SEC's actions.
This regulatory pressure is not new; earlier this week, the Department of Justice charged four market makers and others with fraud in market manipulation cases. On the same day, SEC Chair Gary Gensler expressed skepticism about Bitcoin and crypto becoming a significant means of payment, alluding to the reputational challenges the industry faces.
"We can expect considerable market volatility leading up to the elections, possibly keeping Bitcoin range-bound during this period," concluded Thompson.
