Bitcoin falls back below $26,000, "looking uninspired"

(Sharecast News) - New falls in the cryptocurrency market. Bitcoin (BTC) trades below $26,000 again and settles around $25,800, while Ethereum (ETH) drops to $1,610. The market's mood remains subdued. Any minimally positive news quickly makes digital assets climb, especially the reigning cryptocurrency, but they fail to break above the levels at which they have been moving and end up back in the red after a short time. Last Friday, for example, rumors that JP Morgan would be developing a blockchain-based payments system sent BTC up to $26,200, but it didn't take long for it to trade back around current levels.

Craig Erlam, senior market analyst at OANDA, believes that Bitcoin is continuing to struggle, and arguably the industry as a whole, despite the recent victory for Grayscale over the Securities and Exchange Commission (SEC). For Erlam, that the regulator extended the deadline to rule on BlackRock's and other companies' spot ETFs is a particularly frustrating but necessary hurdle.

"In the meantime, Bitcoin finds itself back around $25,000 and looking rather uninspired. Of course, as we've seen so often in the past, that can change in a heartbeat," the expert added.

However, the data does not seem to provide grounds for a rebound in digital assets barring any major headlines in the crypto space. According to CCData, spot trading in cryptocurrencies is at its lowest level since March 2019: spot trading volume on centralized crypto exchanges retreated 7.78% to $475 billion in August, while derivatives volume fell more than 12% to $1.62 trillion, the second lowest since 2021.

However, there are positive signs going forward. ARK Invest, a manager led by Cathie Wood and a driver of BTC and ETH spot ETFs, noted in a report the increased sentiment regarding the conversion of Grayscale Bitcoin Trust (GBTC) into a spot ETF. According to ARK, GBTC's net asset value (NAV) discount, which represents the difference between the market value of the fund's holdings and the market value of the fund itself, fell to the lowest levels in about a year at an 18% discount after reaching 24% last August. This discount was as high as over 40% at the peak of this year's rallies.

On the other hand, it is still unclear how the U.S. Commodity Futures Trading Commission's (CFTC) recent advance on several decentralized finance companies (DeFi) may affect the market.

"I believe that these rapid legal developments, which are now expanding to include many aspects related to cryptocurrencies and associated technology, will continue to shape the regulatory and legislative environment for this market, even though they may temporarily frustrate traders. However, further actions by law enforcement authorities may contribute to reducing the state of uncertainty and loss of confidence in this market in the future, with clarity on what is legal and illegal," explained Samer Hasn, market analyst at XS.com.

In other market news, highlights include declines of 1% for Cardano (ADA), 2% for Solana (SOL) and 3% for Ripple (XRP).