Bitcoin (BTC) trended downwards over the weekend while staying squarely in the 27.5k to 28.5k trading range favoured by the BTC/USDT trading pair in recent weeks.
Bullish ambitions of breaking above the psychological 30k barrier appear to have been put on the back burner for now, with hopes instead pinned on stabilising around the US$28,000 price point.
Conversation has now pivoted to the amount of liquidity in the market, or lack thereof.
As noted in a recent Bloomberg piece, insufficient order book strength is leading to higher bid-to-ask spreads, causing slippage in order prices and higher volatility.
There are a few clear reasons for bitcoin’s declining market liquidity. First and foremost, most major fiat-to-crypto on-ramps are facing intense scrutiny from US regulators.
Two of the largest, Binance and Coinbase, have been subject to enforcement actions from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), causing consternation among would-be traders.
Mark Connors, head of research at digital asset management firm 3iQ, stated that “the tourists are definitely gone”. In other words, many have taken their profits while they could, causing selling pressure.
Bitcoin (BTC) fails to regain 30k – Source: currency.com
At the time of writing, BTC/USDT was changing hands at US$27,900, having dipped about 2% overnight.
Binance’s order book shows buying support at US$27,000 and US$26,500.
Ethereum (ETH) also lost ground over the weekend, dipping 1.5% on Sunday and a further 0.2% so far this Monday morning, although there has been some upward price action on the one-hour candlestick chart.
At the time of writing, ETH/USDT was trading at US$1,790.
Cardano (ADA) pulls ahead
Cardano blockchain’s native cryptocurrency ADA (named after renowned English mathematician Ada Lovelace) shot 5% higher on Monday morning, making it the best performer among the top-20 altcoin set.
ADA’s market capitalisation is now around 14% higher week-on-week at US$13.8bn, potentially encouraged by a few upgrades on the horizon relating the Ethereum compatibility and decentralised governance.
In terms of overnight risers, Layer-1 blockchain Solar’s SXP token topped the list by adding 6%, thus bringing the altcoin into the top-100 club at rank #95.
Global cryptocurrency market cap dipped 0.9% overnight to US$1,17tn, while total value locked across all decentralised finance (DeFi) protocols fell 1.4% to US$49.45bn.