Bitcoin briefly dropped below $30,000. Large investors massively sell BTC on exchanges
The number of “whales” among Bitcoin holders , that is, market participants whose capital exceeds the bar of 1000 BTC, is rapidly declining. In particular, this indicator has already reached its lows since the beginning of the year. At the same time, the volume of cryptocurrency on the exchanges, on the contrary, is at its maximum over the past three months. All this is happening against the backdrop of a rapid fall in the price of Bitcoin since the beginning of the week below $30,000. Well, the pressure on the niche of crypto assets is really strong now. Let's talk about the situation in more detail.
As usual, let's start with an explanation. Bitcoin set a new local low today at $29,730. This is the lowest cryptocurrency result in 2022. As of today, BTC is more than 54 percent behind its all-time high.
In general, the cryptocurrency market is collapsing along with traditional finance, i.e. stocks. However, there were enough reasons for the collapse within the blockchain community. For example, the volume of BTC receipts on cryptocurrency exchanges from personal wallets is 40 percent of the total. In this case, this figure is usually about 10 percent. Accordingly, now the pressure on the market is exerted by the coin holders themselves, who are ready to get rid of them at a loss due to panic.
The creators of the UST algorithmic stablecoin from Terra deserve special mention . Ideally, the UST rate should be $1, and the market participants themselves should support it. However, the day before, the so-called decoupling of the token from the required value took place, as a result of which the UST rate went down
At the bottom, the indicator reached 64 cents - again, instead of $ 1. With this in mind, representatives of Terra undertook to conduct transactions with their bitcoins, which were bought to secure the stablecoin. Analysts believe that they took to lending BTC to exchanges, while others suggest that bitcoins were sold to buy UST and stabilize the cryptocurrency. Be that as it may, 42,530 bitcoins worth 1.34 billion dollars were withdrawn from the company's wallet - and this certainly did not have a positive effect on investor sentiment.
As a result, the rate of the stablecoin began to level off, but the trust of users was shaken. In addition, the UST project itself, against the backdrop of the decisions of the Luna fund, clearly proved its centralization.
Today at lunch the situation on the market at the end of the day looks like this.
The fall of Bitcoin continues
Analysts at the Glassnode platform noted several poor indicators for investors in the main cryptocurrency. The first of them is the average volume of inflow of coins to centralized exchanges, which over the past 7 days has reached a maximum of three months. Now this indicator fluctuates around 1755 BTC.
Usually, a large influx of coins to the exchange indicates that the whales are massively getting rid of the cryptocurrency, preparing for the continuation of its price fall. According to Cointelegraph sources, the logic here is simple - traders enter BTC on trading platforms and immediately sell them.
Panic among investors has also reached its peak. This is evidenced by the index of fear and greed, developed by the Alternative platform. Recall that it is based on volatility, trading dynamics, posts in social networks, the Bitcoin dominance index and trends . The index is now talking about "extreme fear" among traders. At the same time, moderate panic in the crypto market persisted for at least a month until the current week.
Despite the bad mood, the number of BTC transactions per day has not yet fallen. There were 233,892 daily transactions worth about $30 billion on Sunday, according to YCharts, which is the average since January 2022.
On a 4-hour chart, the price of Bitcoin fell to the lows of last June at the beginning of the week, and so far the level of $30,000 has served as an important psychological support for traders. But will Bitcoin be able to rebound from it and start a new wave of growth? Or are we waiting for a continuation of the collapse?
The opinions of various analysts and just well-known personalities in the crypto space are divided on this matter. For example, analyst Michael Van De Poppe posted the following chart on his Twitter and stated that Bitcoin could well drop to $30,000. As you can see, his prediction has become a reality. After such a sharp drop, he recommends buying back BTC, which so far also coincides with what is happening.
Another crypto enthusiast, Dylan Leclerc, is more pessimistic about Bitcoin's short-term outlook. He stated that the coin could well drop to $24,300, which is the level at which the “realized price” of the main cryptocurrency is located. Here is a quote from an expert in which he shares his vision of what is happening.
Bitcoin's fall to the realized price is quite possible, this line has been the bottom for the cryptocurrency in previous bearish cycles. The realized price is currently in the region of $24,300.
Recall that the realized price of Bitcoin is the value of all coins at the price at which they were bought, divided by the number of BTC in circulation.
Leclerc also noted that the decline to the realized price line would not have been possible without a variety of negative factors in traditional markets. Unfortunately, this is exactly what it is now - here we are talking about the consequences of the impact of the COVID-19 pandemic on the global economy, the policy of the US Federal Reserve System to increase the base lending rate and geopolitical instability around Ukraine.
Separately, we emphasize that the listed forecasts do not have to come true, since it is simply impossible to predict what is happening in a volatile market in such difficult conditions. Therefore, we recommend that you conduct transactions and investments solely in accordance with your own analysis, thus bearing responsibility for your actions.
We believe that the digital asset industry has indeed experienced another powerful shock. What will happen next is unknown, and especially because of the difficult circumstances in the world. However, in any case, it is important to understand that Bitcoin will not stop working even in the event of a further fall. Well, the sphere of decentralized finance, NFT tokens, stablecoins and other components of the crypto world will also continue to exist and develop. So even if the bearish trend is already with us, in the future the coin niche will only get better.
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