Bitcoin has been facing some headwinds lately, fighting to stay above $9,000 as some traders wait on the sidelines.
The world's largest digital currency approached $9,500 earlier today, but quickly gave up these gains, falling below the $9,000 mark several times, according to the CoinDesk Bitcoin Price Index (BPI).
Bitcoin fell to as little as $8,860.87 today, representing a roughly 6.5% decline from the day's high of $9,474.86, additional BPI figures show.
[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
When explaining Bitcoin's recent price activity, several analysts pointed to both ongoing regulatory developments and also the uncertainty surrounding the sale of Bitcoin held by Mt. Gox's bankruptcy trustee, who some market observers have dubbed the "Tokyo Whale."
Regulatory Uncertainty
"There is a lot of uncertainty in the market right now, since there has been little guidance about resolutions to the impending regulatory actions by US agencies," said James Song, founder and CEO of blockchain startup ExsulCoin.
Charles Thorngren, CEO of Noble Alternative Investments, also weighed in on how regulatory developments are affecting digital currency markets.
"With the influx of Wall Street and short term traders into the Crypto space, we see events such as regulatory concerns have a great effect on the pricing of all Crypto's."
He emphasized that since Bitcoin is "the largest of them, it often bears the brunt of the short sellers and traders."
Mt. Gox Sale
Analysts also highlighted the Mt. Gox sale of more than 35,000 Bitcoin, as well as the uncertainty surrounding further distribution, as impacting cryptocurrency markets.
The decision to sell roughly $400 million worth of Bitcoin has "introduced downward price pressure in cryptocurrencies, which likely will not abate until there is some clarity as to whether they'll continue selling or wait a while," said Song.
"There are rumors of a pause in selling until September 2018," he added.
Mati Greenspan, senior market analyst for social trading platform eToro, also commented on this situation.
"We have the MT. Gox whale that can sell at any time so many cryptotraders are just thinking that they'll pick it back up once the upward price movements return," he claimed. "But until then they’re staying out."
Anxious Traders
Considering these variables, many market participants are anxious, noted Jeff Koyen, CEO of 360 Blockchain USA.
"Everyone wants to get back in the pool, but Wall St is still too nervous to commit," he stated.
"While we wait, the real crypto traders are accumulating as the markets move sideways."
Disclosure: I own some Bitcoin, Bitcoin Cash and Ether.
