The price of bitcoin (BTC) has declined by nearly 1% over the past 24 hours, dropping below $25,700 after the long Labor Day weekend. Just a week ago, bitcoin had surged above $28,000 following Grayscale’s legal victory against the SEC regarding the conversion of the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF. However, the excitement surrounding the potential approval of a bitcoin ETF quickly faded as the SEC delayed decisions on several other spot bitcoin ETF applications, including those from BlackRock and Fidelity.
The current price level of around $25,000 is the lowest for bitcoin since mid-March when the price was on an upward trajectory. A well-followed analyst, Will Clemente, described the current market sentiment as apathy, pointing out that crypto’s trading volume is at its weakest since 2020, Google search trends are at multi-year lows, and realized volatility and weekly Bollinger Bands are nearing record lows.
In other news, Saudi Arabia and Russia surprised the markets by announcing an extension of oil production cuts for another three months until December. This unexpected development caused the price of WTI crude oil to rise by over 1% to $86.74, reaching its highest level since November 2022. Higher oil prices can lead to increased inflation and subsequently higher interest rates. This could potentially divert capital away from risk assets like bitcoin, as investors may opt for other options such as 30-day T-bills offering a 5% interest rate.
The upcoming release of the U.S. Consumer Price Index (CPI) report for August on September 13 will provide further insights into the country’s inflation levels.