Proactive Investors - Benchmark cryptocurrency bitcoin (BTC) has fallen around 6% month to date as we surpass the halfway point for June, though a pause in US Federal Reserve base rate hikes provided some upside relief in the past 24 hours.
BTC/USDT rounded Thursday off 1.9% higher at US$25,600, after recovering from a three-month low of US$24,800.
The pair fell slightly again this Friday morning to change hands at US$25,555 at the time of writing.
Bitcoin pares back early-year gains – Source: currency.com
A raft of existential pressures, primarily a barrage of regulatory enforcement actions against the two largest fiat-to-crypto onramps Binance and Coinbase (NASDAQ:COIN), has caused anxiety among cryptocurrency investors.
Liquidity concerns have thus begun to emerge as traders weigh up the risk of maintaining long positions in the volatile cryptocurrency space.
Kaiko data shared by CoinDesk shows that average daily trading volumes across the whole crypto space (excluding stablecoins) are over 40% lower in the second quarter of 2023 compared to the first quarter, with bitcoin bearing the brunt.
Underscoring these market anxieties, Blockchain.com data shows a fairly consistent downward trajectory for daily bitcoin transactions in the second quarter.
Heightened volatility should be expected if market liquidity continues to decrease.
At US$1,672, Ethereum (ETH) has dipped by over 10% month to date, though significantly larger losses have been chalked up in the wider altcoin space.
Polygon (MATIC), Polkadot (DOT), Solana (SOL) and Cardano (ADA) are well into the double-digit loss territory.
Looking at the crypto market as a whole, global market capitalisation currently stands at US$1.04tn, having dipped around 8% in June so far.
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