The crypto market is ailing. All top coins come under selling pressure and shift into reverse gear at the weekend. Are there any signs of a downward trend?
After months of upward trend, the crypto market is showing the first signs of fatigue. While the Bitcoin price rose to 51,000 US dollars in yesterday’s trading, it fell to 45,321 US dollars with a 24-hour loss of 11 percent at the time of going to press. The Altcoins also clearly had to give up. With the exception of Cardano (ADA) and the Stablecoin Tether (USDT), all top coins recorded price losses in the double-digit percentage range. Binance Coin (BNB) and Polkadot (DOT) each got hit particularly hard with a 15 percent discount. But Ethereum is also turning significantly south, with a minus of 13 percent compared to the day. Have the bears awakened from hibernation?
While the bulls have had the market firmly under control in the past few weeks, the bears are now coming back loudly. In just 24 hours, total market capitalization dropped by $ 160 billion. Bitcoin market capitalization has slipped back below the 1 trillion mark since Tuesday, falling to $ 850 billion.
Even if the war of direction between bears and bulls takes place at the 50,000 mark, the indicators continue to point to growth. According to Ki Young Ju, CEO of the blockchain data platform CryptoQuant, there were massive re-purchases in yesterday’s trading. Around 13,000 Bitcoin have flowed from the Coinbase crypto exchange to several Coinbase Depot wallets. According to this, “US institutional investors were still buying Bitcoin at a price of 48k.” According to Ju, this is “the strongest bullish signal” he has “ever seen.”
Glassnode CEO Rafael Schultze-Kraft also agrees with Ju . Accordingly, “the amount of illiquid Bitcoin supply in the network has grown faster than the circulating supply since 2017”. The illiquid supply measures the amount of all Bitcoin that is held or has been lost. Glassnode estimates the value of all illiquid Bitcoin at 14.5 million BTC or 78 percent of the amount in circulation. In combination “with the demand from MSTR, Square, Tesla , Grayscale,” the decline in liquid BTC supply represents a bullish signal.
Glassnode co-founders Jan & Yann also only expect a short period of weakness. Compared to the price crash in mid-January, in which Bitcoin slipped from 40,000 to 30,000 US dollars, significantly fewer coins have changed hands. Based on the “Hodler Net Position Change,” a metric that shows “the monthly change in position of long-term investors,” only a slight exit from long-term investors can be seen. The same applies to miners who seem to be “holding on to their coins.” In addition, significantly less Bitcoin was transferred to exchanges in comparison. The profit-taking is therefore significantly lower than in the previous month.
And even in January, Bitcoin quickly recovered from the upheavals. Consolidation lasted just two weeks before the price shot over $ 50,000 at a rapid pace. It, therefore, seems unlikely in the long term that Bitcoin will steer straight into a bear market. It cannot be ruled out that major corrections may still be made in the following days.
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