Fears of a mass sale event by the U.S. government, along with uncertainty over how the U.S. presidential race will affect crypto regulation, also kept traders largely averse towards crypto.
Bitcoin stood at $64,649.0 by 08:33 ET (12:33 GMT), after sinking as low at $63,697.1 earlier.
The world’s biggest cryptocurrency was set to lose over 5% this week, as sentiment towards crypto markets soured amid growing uncertainties in the sector.
Bitcoin was dented by reports that the U.S. government had mobilized about $2 billion of confiscated tokens for a potential sale- a scenario that presents downward pressure on Bitcoin’s price.
A broader risk-off sentiment also kept traders averse towards crypto markets, as a swathe of weak economic readings from the U.S. and China ramped up concerns over slowing growth, driving traders into safe havens such as gold, the dollar and the Japanese yen.
Global stock markets saw a deep rout on Thursday and Friday amid increased risk aversion.
Additionally, uncertainty over the U.S. presidential election was also in play after a Bloomberg poll showed Democratic frontrunner Kamala Harris now tied with Republican nominee Donald Trump, diminishing the prospect of a Trump presidency. Crypto markets had last week rallied on comments from Trump that he will foster the industry if reelected.
Harris, on the other hand, has made no open statements about crypto. But it is widely assumed that she will continue to Biden administration’s crackdown against the sector on the grounds that it fosters fraud.
Following its latest decline, Bitcoin is now hovering near its 50-day moving average, which serves as a key support line for some traders.
“If the decline develops, dynamics around the $63K and $61K levels, near where the 50 and 200-day moving averages are, will be important. A failure of this support will open the way to $55K, which is quite frightening,” a market analyst at FxPro reportedly told CoinDesk via email.
“August is considered one of the two worst months for BTC. Over the past 13 years, bitcoin has ended the month up only five times and down eight times. The average decline was 15.4% and the average rise was 26%,” they added.
The broad sell-off in BTC also impacted some bitcoin exchange-traded funds. While U.S.-listed BTC ETFs saw a total daily net inflow of $50.6 million, funds such as GBTC, FBTC, ARKB, BITB, and HODL experienced outflows. In contrast, Ether ETFs collectively posted a net inflow of $26.75 million, although many showed zero flow.
Among broader crypto markets, major altcoins tracked weakness in Bitcoin amid few positive cues. Altcoins were also headed for weekly losses.
World no.2 token Ether fell 2% to $3,135.21 and was headed for a 3.5% weekly loss. The token saw little cheer from the launch of spot exchange-traded Ether funds in U.S. markets last week.
XRP, ADA and SOL fell between 2.5% and 6.5%, while among meme tokens, DOGE and SHIB fell around 3% each.
Source: Cryptocurrency - investing.com
