Investing.com - Cryptocurrencies were lower on Wednesday, with Bitcoin under pressured as it neared its fifth month of a bearish moving average.
Bitcoin was trading at $7,881.40, falling 4.27% as of 8:23 AM ET (12:23 GMT) on the Bitfinex exchange.
The five-month moving average of Bitcoin is at $8,916, with the 10-month moving average at $8,379, far from its almost $20,000 high in December. The decrease in prices could indicate lower price movements in the long term, some analysts say.
Total market cap was at $344 billion, down from $382 billion on Tuesday.
Other digital coins were lower, with Ethereum, the world’s second largest cryptocurrency by market cap, down 10.36% to $620.25 on the Bitfinex exchange. Ripple, the third largest virtual currency, decreased 8.60%% to $0.61299 while Litecoin was at $124.26 a slump of 6.57%.
The volatility of the digital asset market could have more to do with how investors feel than other factors that usually impact fiat currencies, a research paper from the University of Warwick found.
Trading volumes are driven by past returns and market uncertainty, while confidence in blockchain technology and digital currencies also impact prices, said Daniele Bianchi, author of the report and assistant finance professor at the university.
“Just as the value of a US dollar investment fluctuates based on countless factors such as national interest rates, trade deficit with other countries and government policy, cryptocurrencies trade at prices which are based on the perceived value of the platforms and projects they are associated with,” he said.
Meanwhile virtual currencies continue to face pressure from regulators, who view the alternative currencies as risky for consumers.
Luis Maria Linde, head of the Bank of Spain, said on Wednesday that cryptocurrencies have more risks than benefits and that a move to a digital economy would pose cybernetic risks.
Linde is just the latest central banker to criticize digital currencies, with Minneapolis Federal Reserve President Neel Kashkari calling the sector a “farce” on Monday.