After rising for over a month and breaking above $30,000 for the first time in 10 months, Bitcoin entered into a sharp decline earlier this week. The decline that nearly saw the world’s largest cryptocurrency fall below $28,000 started shortly after Gary Gensler, the SEC Chair, gave his testimony to the U.S. House Committee on Financial Services.

Bitcoin Barely Stays Above $28K After Two-Day Decline

After a fairly stable month-long rise that started with the collapse of three major US banks within less than a week in early March, Bitcoin entered into a relatively sharp decline earlier this week. Wednesday and Thursday featured a particularly sharp drop as the world’s largest cryptocurrency fell from just above $30,000 to just above $28,000.

While it would be hard to point toward a single event that could explain the sharp decline, the current week brought several pieces of bad news. The recent testimony of SEC’s Gary Gensler failed to offer any real clarity about the Commission’s stance toward cryptocurrencies with the Chair even avoiding opining on whether he considers ETH a security or a commodity.

Additionally, the most recent data from the UK showed that inflation is still above 10%—worryingly above the expected 9.8%. The news had ramifications across the markets and Bitcoin was far from the only asset to go into a decline. Ethereum, for example, lost the price of $2,000 it gained after the successful “Shapella” upgrade and stood around $1,940 at the time of writing.

Multiple cryptocurrency-related stocks were also notably in the red. Coinbase, which recently acquired a Bermuda license as part of its strategy to intensify expansion outside the US, closed 6% down but remained relatively stable in the after-hours. The shares of Michael Saylor’s MicroStrategy performed very similarly also closing 6% in the red.

Bitcoin’s 70% Rally in Q1

Despite the recent downturn, Bitcoin has been having a very strong 2023 so far. After going through a significant, year-long decline last year that saw it fall from just above $40,000 in January, to just above $16,000 in December, the world’s largest cryptocurrency has been in a rally nearly constantly since New Year.

January of this year proved to be one of the best for Bitcoin in around a decade and was accompanied by a broader rally of other major cryptocurrencies and cryptocurrency-related stocks. Throughout February, its price remained mostly stable around $23,000, and even went into a slight decline at the beginning of March.

The trend was, however, quickly reversed after three banks—Silvergate, Signature, and Silicon Valley Bank—collapsed shaking confidence and driving more investors to seek refuge in digital assets. Additionally, while Bitcoin entered another decline earlier this week, a recent report published by K33 Research suggests that it might rise as high as $45,000 by May.

This article originally appeared on The Tokenist

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