The price of Bitcoin (BTC) has fallen to $26,000 U.S. amid volatile trading and low liquidity in the cryptocurrency market.
Bitcoin was trading at $26,300 U.S. in early trading on May 12, its lowest level since March 17 of this year. Bitcoin had been above $30,000 U.S. as recently as April following the high-profile failures of several banks in the U.S. and Europe.
Ethereum (ETH), the second biggest cryptocurrency by market capitalization, is also down and trading at $1,765 U.S. Ethereum’s price had been above $2,000 U.S. in recent weeks.
Several issues are negatively impacting cryptocurrency markets right now, including low liquidity, a regulatory crackdown, and economic concerns among investors.
However, despite the current downturn, Bitcoin remains up nearly 60% this year, outpacing gains in stocks, bonds, and commodities.
In December of last year, Bitcoin’s price had fallen below $16,000 U.S., leading some analysts to forecast that it would decline to $10,000 U.S. or lower.
The current liquidity crunch in crypto markets could get worse in coming weeks as both Jane Street and Jump Crypto, two of the biggest cryptocurrency market makers, have said they will step back from trading crypto in the U.S.
Jane Street and Jump Crypto each cited the current regulatory crackdown by the U.S. Securities and Exchange Commission (SEC) as reasons for their pulling back.
Scrutiny from U.S. regulators has intensified following the $8 billion U.S. collapse of cryptocurrency exchange FTX last November.
