Bitcoin (BTC-USD) and Ethereum (ETH-USD) are on track to end the week down more than 9% amid liquidity concerns due to low participation from institutional market makers and ongoing regulatory scrutiny.

The top cryptocurrency broke above $28,000 following the release of the latest CPI report, which showed that inflation cooled year-over-year, increasing the likelihood that the Federal Reserve will pause its rate hikes at its June meeting. However, Bitcoin (BTC-USD) later gave up its post-CPI gains and turned lower amid increased regulatory scrutiny and reduced participation from institutional market makers.

“Bitcoin (BTC-USD) is weakening as the dollar surges and Wall Street gets nervous about some macro risks,” said Edward Moya, senior market analyst at OANDA. “Until there is clarity on U.S. regulation, BTC still faces further downside pressure.”

Bitcoin (BTC-USD) fell to a near two-month low of $25,880 on Friday and has traded in a range of $25,900 to $29,800 this week.

The overall cryptocurrency market cap totaled $112 million, up 0.5% from Thursday, according to CoinMarketCap. The craze for BRC-20 appears to be fading, with the total BRC-20 market cap falling to around $460 million from $916 million earlier this week, according to OrdSpace.

Binance briefly suspended Bitcoin (BTC-USD) withdrawals earlier this week due to increased network congestion. This prompted the exchange to increase transaction fees, which put pressure on BTC prices.

Binance also said it was exiting Canada in light of the country’s new guidance on stablecoins and investor restrictions offered to cryptocurrency trading platforms.

Revenue Review

  • Bakkt (BKKT) fell after its first-quarter results fell short of Wall Street expectations. It expects to break even on cash flow for the remainder of FY23.

  • CleanSpark (CLSK) reported better-than-expected second-quarter earnings as a rebound in BTC prices boosted gross margins.

  • Marathon Digital (MARA) reported improved first-quarter results compared to the fourth quarter, thanks to a rebound in BTC and lower mining costs. It also formed a joint venture with Abu Dhabi-based blockchain company Zero Two to build the Middle East’s first large-scale immersive BTC mining operation.

Important News

  • A former Coinbase (COIN ) product manager has been sentenced to two years in prison for insider trading in certain cryptocurrencies before the exchange announced they were available.

  • FTX ( FTT-USD ) co-founder Sam Bankman-Fried has asked a U.S. judge to dismiss most criminal charges against him.

  • Do Kwon of Terraform Labs pleaded not guilty to forging travel documents at a hearing in Montenegro.

  • The Bank of Canada is exploring a digital version of its national currency and seeking public input on features that should be included.

Bitcoin and Ethereum prices

  • At 6:32 p.m. ET, Bitcoin (BTC-USD) was down 0.9% at $267,800, while Ethereum (ETH-USD) was up slightly by 0.5% at $18,100.

  • SA contributor Muhammad Umair noted that BTC’s rally to $28,000 encountered resistance, signaling further declines. “A key factor to confirm the bearish outlook is a weekly close below $27,000 again. Investors are advised to take advantage of any upward price rebounds by taking a sell position.”