The now rather infamous 'crypto winter' which referred to the latter part of 2022 had appeared to show some signs of subsiding recently.
After many months of relatively low and somewhat stagnant cryptocurrency values, some of the more popular digital currencies had begun to make a little bit of headway over the first few weeks of 2023.
By the end of January 2022, it looked as though the value of many of the most popular cryptocurrencies, especially Bitcoin and Ethereum, were emerging from the doldrums and beginning to make a resurgence in value, with Bitcoin hitting $23,783 on January 30.
Of course, this is a far cry from the $60,000 ballpark which Bitcoin reached in 2021, but considering the under-$20,000 range it has been languishing in for a few months, it is a considerable upturn in fortunes.
However, since yesterday, Bitcoin has been declining in value once again, going from $23,380 during the night (1.15am UK time) to $23,159 by 11.00am UK time today.
That is a 66 point decrease in value, 0.28% in percentage terms, which may not seem a large movement, but it does represent a downturn of considerable monetary value, putting an end to the climbing values.
It could be that accessibility may be a factor, as Binance, one of the world's largest cryptocurrency exchanges announced yesterday that will suspend U.S. dollar withdrawals and deposits for international customers beginning today, resulting in a significant capital outflow from Binance and Bitcoin withdrawal figures going up overall.
Binance stated that it remained 'net positive' after the withdrawal run took place, however such a rush to divest from an exchange in one go means that actual trading volume in Bitcoin would likely be affected, which may also be contributing to the lower values today.
Binance has stated that this suspension of US dollar transactions is temporary, but of course any action which causes a mass withdrawal of assets from a trading venue is always likely to affect overall trading volume.
So, whilst overall Bitcoin is being viewed through a bullish lens, largely because of the US Federal Reserve bank's latest less aggressive rate hike of just 25 basis points, which helped Bitcoin to maintain its rising trajectory and outperform as compared to other asset classes, any action affecting trading in which a mass withdrawal takes place is likely to have some effect.
It may be temporary, and if so, volatility is definitely on its way back to the crypto market.
FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage, 30% margin call, 0.01 lot minimum transaction size with no maximum — at your service. Open your trading account now or learn more about making your money go further with FXOpen.
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.