Bitcoin plummets. Crypto traders remain optimistic, but that could only drive prices down.

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Bitcoin and other cryptocurrencies were lower on Friday as regulatory pressures weighed on sentiment. Crypto traders remain optimistic, but big bets on a rebound can only hurt prices in the short term.

The price of Bitcoin has fallen 3% in the past 24 hours to $28,000, falling further from the psychologically important level of $30,000, which it topped last week for the first time in 10 months.

It’s worth bracing for a more typical pullback from the 50-day average near $26,700, said Alex Kuptsikevich, analyst at broker FxPro. Such a drop promises to fray the nerves of crypto enthusiasts. A break below this level could quickly take the price to $25,600, the all-important 200-week moving average, the capture of which allowed the bull market to be declared resurgent in March.

While Bitcoin fell this week on some weakness in the stock market, it underperformed against the Dow Jones Industrial Average and the S&P 500 amid concerns about the critical US market regulatory backdrop. Broker Coinbase Global (ticker: COIN), for its part, has signaled that it is increasingly looking overseas in a lack of clarity that could hurt the business.

Despite the decline, the bulls don’t appear to have given up yet as Bitcoin’s futures funding rate is still positive, which could limit Bitcoin’s higher potential and worsen its short-term pullback, said Yuya Hasegawa, analyst at Bitbank.

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Beyond Bitcoin, Ether, the second largest crypto, fell 2% to below $1,925. Smaller cryptos or altcoins were weaker, with Cardano down 3% and Polygon plunging 4%. Memecoins showed much of the same, with Dogecoin down 8% and Shiba Inu losing 3%.

Write to Jack Denton at [email protected]

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