Early morning gains for the crypto were quickly erased in Thursday afternoon trading.

Bitcoin (BTC) tumbled back below $27,000, reversing its advance from a day ago as investors continued to weigh the ongoing debt ceiling talks in Washington, D.C. and the latest regulatory moves.

The largest cryptocurrency by market capitalization was recently trading at around $26,700, down 2.1% over the last 24 hours, according to CoinDesk data. BTC had challenged $27,500 Thursday morning, but a quick pullback early in the afternoon took the price down to nearly $26,400.

“Bitcoin is hovering near its recent lows as investors await regulatory clarity and whether Wall Street believes any use-case arguments will be made anytime soon,” Edward Moya, senior market analyst for foreign exchange market maker Oanda, wrote in a Thursday note. “This frustrating trading range has turned off many investors and if the crypto fundamentals don’t improve anytime soon, downward pressure could resume,” he continued.

Over $20 million of BTC futures were liquidated in the past four hours, with 87% of them being long positions, or bets on higher prices.

Ether (ETH), the second-largest cryptocurrency by market capitalization, followed a similar trend, down 1.6% to change hands at around $1,795 on Thursday afternoon.

which measures the overall crypto market performance, was down 2.2% on Thursday.

Equity markets closed higher Thursday afternoon, with a late rally pulling the Nasdaq higher by 1.5% the S&P 500 by 0.95%, and the Dow Jones Industrial Average by 0.35%.

“The Nasdaq and other tech-focused investments have played a little bit of catch-up” this year, he added. “At the same time, we're seeing bitcoin consolidating around [near] between $27,000 to $30,000 level.”

While some analysts argued that the debt ceiling debate could boost “safe-haven” assets such as gold and bitcoin, Tapscott said he’s not convinced that BTC’s price will go up in the event of a government default.

Bitcoin’s 2024 halving cycle

While the market wavers during these debt ceiling talks, Ninepoint Partners' Tapscott suggested that investors will soon be pivoting their attention toward BTC’s 2024 halving cycle that “typically precedes a bull market in crypto.”

Messari Research Analyst Sami Kassab told CoinDesk in an email that when examining price charts from the last three halvings – 2012, 2016, and 2020 – “it becomes apparent that bitcoin has consistently entered a bull market within 12-18 months prior to each halving event.”

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