The cryptocurrency market experienced fluctuations on Friday, with Bitcoin and Ethereum showing signs of struggle despite a positive start earlier in the week. Bitcoin, which surged to $94,600 on Wednesday, was trading around $95,300, marking a 4.6% increase over the last seven days, as reported by the crypto price aggregator CoinGecko. Meanwhile, Ethereum rose by 5.9%, reaching $3,250 during the same timeframe.
However, trading volumes took a hit, with Bitcoin’s trading activity dropping by 27% to $65 billion, and Ethereum’s volume declining by 32% to $54 billion, according to data from CoinGlass. This downward trend also affected other digital currencies like Solana, XRP, and Dogecoin.
A major factor contributing to the market’s waver was Coinbase’s recent decision to withdraw support for a proposed crypto market structure bill after a series of lobbying efforts on Capitol Hill. This move elicited frustration among lawmakers, particularly regarding the Securities and Exchange Commission’s stance toward crypto firms. Despite this setback, Coinbase CEO Brian Armstrong expressed optimism about the bill’s future during an appearance on Fox Business, emphasizing a bipartisan approach.
Carlos Guzman, a research analyst at crypto trading firm GSR, noted a sense of diminished optimism regarding the CLARITY Act, which is intended to provide clarity for digital asset regulation. He pointed out that expectations for the bill’s passage had recently been lifted due to a new version being introduced, but those hopes seemed to falter after delays in legislative action by the Senate Banking Committee.
The market uncertainty was further exacerbated by geopolitical tensions in the Middle East and developments regarding Federal Reserve policy. Fed Chair Jerome Powell warned against perceived efforts by the White House to undermine the central bank’s independence, coinciding with revelations about Justice Department subpoenas related to testimony he provided on a significant renovation project for the Fed’s headquarters.
On a more positive note, spot Bitcoin exchange-traded funds (ETFs) saw consistent inflows, attracting about $1.8 billion over four days, indicating a growing interest in these investment vehicles. Jasper De Maere, a desk strategist at crypto market maker Wintermute, highlighted that while participation has remained narrow, the bulk of the market activity has been driven by institutional investors rather than retail traders. He noted that while retail participation has been subdued, recent price increases might signal a shift as Bitcoin continues to capture attention in the news.
As the cryptocurrency market navigates these complexities, the outlook remains a blend of cautious optimism and significant challenges influenced by both legislative actions and external economic factors.
