After a relatively quiet weekend, the price of bitcoin began to lose value today and sank to a 12-day low of $26,000.
Most altcoins are also trading lower, with XRP and Toncoin down around 3%.
The price of Bitcoin started rising early last week, surging above $27,000 and reaching $27,500 last Tuesday. After a day of trading at those levels, the asset lost most of its momentum and began to tumble.
This ended with the price falling to $26,400 on Thursday, around the same time as the US Federal Reserve announced a change to monetary policy by refusing to raise interest rates again.
Currently, BTC has managed to defend the level of $26,000 , but its market cap has fallen below $510 billion, and its dominance over altcoins has dropped to 48.9% in CMC.
Recent data shows that Bitcoin trading volume has experienced a significant decline this year, and recent market activity is marked by low volatility and a narrow price range, which limits trading opportunities.
Based on CryptoQuant's latest analysis, this is a dangerous situation for Bitcoin, which is now at risk of a decline. The platform shows that the liquidity of the Bitcoin market has decreased significantly this year.
Bitcoin derivatives trading volume, for example, has declined by 73% since March 2023. Crypto spot trading has seen an even worse decline and is now down 94% over the same period.
Meanwhile, there has been a significant drop in Bitcoin trading volume in recent months. Data from CoinMarketCap shows that in just the last 24 hours, trading volume has declined by more than 32%.
Since liquidity in both the spot and derivatives markets is important for price growth, the recent decline in liquidity raises concerns about the stability of the Bitcoin market.
Therefore, lack of liquidity can cause high price volatility.
Experts suggest that if Bitcoin fails to maintain its bullish momentum and could fall below the important support level of $25k.
