Affected by the current carnage in the crypto market, the price of Bitcoin (BTC) hit its lowest valuation since December 2020 at $26,350 on May 12. Continued bearish trend from May to June 2021.
In both market crashes, Bitcoin’s price broke above the $30,000 resistance. More recently, when BTC’s valuation stopped falling to $29,800, its decline outpaced the June 2021 reversal. In contrast, its price in the current market conflict has hit the $26,3000 level.
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In both cases, several macroeconomic factors influenced the crypto market. For example, ahead of a bearish 2021 trend, China’s banks blocked the use of crypto by banning crypto services for the country’s financial sector. Then Elon Musk added fuel to the fire by reversing his decision to use Bitcoin for Tesla payments. Also, the distortion of COVID-19 has caused some major countries to withdraw from the blockchain industry; as a result, the BTC price has fallen sharply.
Likewise, in the recent downtrend, geopolitical conditions and macroeconomic facts determine Bitcoin’s fate. First, the Russia-Ukraine conflict has greatly affected the price of cryptocurrencies, and regulators are imposing strict regulations on a daily basis as Bitcoin begins to grow globally. Then legal ambiguity and the Federal Reserve’s regulation of digital assets further sent bitcoin prices plummeting.
Bitcoin holders rush to exit the asset
Cryptocurrency investors have been withdrawing their holdings after the recent slump, with many still clinging to losses and anticipating another rise in cryptocurrency prices in the future. According to the statistics, 16,967,726 wallet addresses are currently losing money and breaking the previous record. Crypto history saw a similar peak in September 2020.
The unusual behavior of the crypto market forced investors to liquidate their assets, ignoring the losses they suffered. That’s why the numbers for the following metrics have dropped. Now, the number of crypto traders holding 1K+ coins in their wallets has dropped to a low of 2,234, and most importantly, this number was recorded on May 11.
A new record for Bitcoin network transactions was set again on May 11, as cryptocurrency holders rushed to exit their investments. Its trading volume reached a 4-year high of 175,146.8 BTC. Recent committed volumes have surpassed previous highs.
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Considering the current state of the crypto market, Scott Melker, host of The Wolf of All Streets Podcast, Comment “The whole market is shaking.”
I think the market is in a completely irrational panic. The pendulum has swung to extreme terror, as usual. This leads people to sell assets at or near the bottom.
Featured image from Pixabay and chart from TradingView.com