Business & Economy
Crypto Market Sell-Off Continues As Bitcoin Falls Below $34,000
Crypto Market sell-off has continued as Bitcoin has fallen below $34,000.
In just barely two weeks, Newsonline reports that Bitcoin has lost almost $7,000 or 11.81% from $40,269 to currently trade $33,512 as of the time of this writing, as sell-off continues to deepen in the cryptocurrency market alongside technology stocks listed on the U.S. exchanges.
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In fact, the number of Bitcoin whales is rapidly decreasing to levels not seen since earlier this year, possibly due to the three-month high of coin inflows to centralized exchanges. On-chain analytic tracker Glassnode has issued several bearish indicators for the flagship cryptocurrency asset, including data suggesting a market exit for whales holding at least 1,000 coins, and exchange inflows of more than 1.7 million coins, the most since February.
Due to the massive sell-off being witnessed, we are seeing the cryptocurrency market capitalization trade $1.52 trillion, the lowest since January 2022, when we experienced selloffs as a result of inflationary concerns and reduced participation in the market.
What you should know
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- The signs of the selloffs have been written on the wall. Nairametrics had earlier reported that Institutional investors shed $133 million worth of Bitcoin investment products two weeks ago, mark ing the largest week of outflows since June last year, as Bitcoin’s price tumbles below $38,000 over fears of the impending U.S. Federal Reserve’s interest rate hike.
- Even for Altcoins, institutional investors have been seen to sell off their Ether positions, to the tune of $25.1 million two weeks ago, as institutional investors seem to be interested in Ethereum alternative token but however, the investments do not amount to the investments taken out of Ether.
- The declines in the market are so steep, that we now have three stablecoins ranking in the top 10 by market capitalization. AVAX and DOT have both lost their positions as top 10 cryptocurrencies as a result of the market selloff.
- Bitcoin had stayed mostly between $35,000 and $46,000 for the past couple months, so the latest price decline might mark the beginning of a new market trend.
- Some traders may have been rattled by data showing that the Terra blockchain’s stablecoin, UST, briefly lost its peg on Saturday. The Luna Foundation Guard, which maintains a standby reserve that kicks in if the “algorithmic stablecoin” falls below $1, held about $3 billion of bitcoin as of last week.
- Unfavorable outlooks on the market based on hard data have led the Bitcoin Fear and Greed Index to drop to 11, the “Extreme Fear” region. The index rates the general amount of fear or greed among Bitcoin investors.Despite the poor sentiment, BTC daily transactions do not yet appear to have been negatively affected. According to on-chain data from YCharts, there were 233,892 daily transactions worth about $30 billion on May 8, which is the normal average since January.
Market analyst, Caleb Franzen tweeted on Sunday that investors should look for markets to continue trending downward based on his analysis suggesting we will remain “short-term bearish.” He concluded by stating that it “seems worthwhile to expect more pain.”
