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Why is the battered Bitcoin price tumbling again today?

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A man sits at his computer with his head in his hands while his laptop screen displays a Bitcoin symbol and his desktop computer screen displays a steeply falling graph.

The Bitcoin (CRYPTO: BTC) price is sliding today.

Again.

In early afternoon trade on Wednesday, the world’s first and biggest crypto is changing virtual hands for US$76,619 (AU$109,097). That’s down 2.4% over the past 24 hours and down 14.5% since this time last week, according to data from CoinMarketCap.

This sees the Bitcoin price down 24.8% over the last year, and it puts the token within a whisker of setting new one-year lows.

It was only on 7 October, less than four months ago, that Bitcoin investors were celebrating the token’s all-time high of US$126,198. But with momentum largely shifting to the downside since then, the world’s biggest crypto is now down 39.3% from those highs.

You’re unlike to hear much celebrating from Ethereum (CRYPTO: ETH) investors either.

The world’s second biggest crypto is down another 4% over the past 24 hours to trade for US$2,258. This sees the Ethereum price down 29.2% in a month and down a steep 54.1% since the token notched its own all-time highs on 22 August last year.

Here’s what’s been rattling crypto markets.

Why is the Bitcoin price going backwards?

Bohan Jiang, senior derivatives trader at FalconX, noted that frustrated crypto dip buyers are adding to the selling pressure (quoted by Bloomberg).

“A lot of the traders were trying to buy the dip, betting on a rebound above $80,000,” Jiang said. “As Bitcon drifts lower, a lot of those positions have been liquidated putting pressure on prices.”

Augustine Fan, partner at crypto options platform SignalPlus, pointed the finger of blame for the Bitcoin price rout at eroding investor sentiment.

“Crypto sentiment is hitting rock bottom,” Fan said. “Volatility has finally moved up after a yearlong move lower as traders scrambled for protection, with markets trading in bear-market mode.”

The Bitcoin price initially got a boost from the launch of various spot exchange-traded funds (ETFs) that directly tracked the token. But those ETFs now are adding to the selling pressure, with material outflows reported since November.

And, like most every risk asset, the token still remains highly sensitive to interest rate moves. With markets now pricing in fewer rate cuts from the US Federal Reserve (and the RBA moving to lift rates yesterday), the crypto looks to be facing added headwinds.

According to AirdropAlert.com’s Morten Christensen (quoted by Bloomberg), “Bitcoin still trades like a high-beta risk asset, not digital gold. That doesn’t mean the thesis is dead; it means it’s not there yet.”

The post Why is the battered Bitcoin price tumbling again today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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