Crypto update: Bitcoin slides as 'hype leaves market'

Cryptocurrencies were recovering slowly but steadily from an earlier sell-off but are once again down on Wednesday, with bitcoin’s price quite a distance from its all-time high of $63,000 (£45,552) in April.

Bitcoin (BTC-USD) fell 0.7%, trading at $34,891 on Wednesday morning.

“If we compare today to the April highs, we can say with absolute certainty that the hype has left the market,” said Mati Greenspan, CEO of Quantum Economics.

He also noted that the average number of transactions per day on the bitcoin blockchain has dropped to levels “not seen since the darkest days of crypto winter” which was about a decade ago.

But he said this is a good thing as the average transaction fee for sending bitcoin, which at one point was more than $60, has come back down to a "manageable level" of around $8.

“As someone who uses the main chain fairly frequently, I'm kind of grateful for the discount, even though it means the value of my stack has been slashed.”

Bitcoin had earlier crashed because of regulatory action in China, which included a crackdown on crypto mining. However, it managed to stay steady despite the UK's financial regulator clamping down on Binance Markets.

Over the weekend the Financial Conduct Authority ordered Binance, one of the world’s largest bitcoin exchanges, to remove all advertising and financial promotions by 30 June.

"The king of cryptocurrencies has made a significant recovery from its recent slump… In contrast, the bulls have carried digital assets above their 20-day average," said Naeem Aslam, chief market analyst at Ava Trade.

"Crypto traders should keep a close eye on the notorious currency's price chart as it approaches its 50 day simple moving average, a critical level that is currently near $38,221."

He said investors are still interested in and even optimistic about the future of cryptocurrencies.

Meanwhile, ethereum (ETH-USD), the world’s second largest cryptocurrency, was down 0.4%, trading at $2,140.

“July could be a pivotal month for ethereum as the number two cryptocurrency works on key upgrades,” said David Russell, vice president of market intelligence at TradeStation Group.

“The efforts follow a sharp pullback in its price, which may create opportunities for investors.”

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