Investors follow this as a general practice for scaling down assets that aren’t performing as expected, but crypto exchanges scaling down bitcoin may not be similar.
Since the beginning of this year, it has now been six months, and still, the crypto market is in constant swings and unable to find stability. The sell-off in the crypto market was continuing for a number of reasons, including regulatory skepticism, fear of DeFi project clashes, outbreak of war between Russia and Ukraine, politics federal reserve currency, etc. boost due to the collapse of the Terra ecosystem and recent growing recession fears.
Cryptocurrencies across the market, including major digital assets like bitcoin and ethereum, reached vulnerable positions breaking their predicted support points of $20,000 and $1,000, respectively. Additionally, the overall loss in total market capitalization of the global crypto market could be called the largest instance of wealth destruction in tech history, where it lost over $1.5 trillion from its value in just a few months. On Saturday, the global crypto market cap fell to just $833 billion.
It wasn’t enough for the on-chain metrics to also be negative for bitcoin (BTC) as more investors exit the ecosystem, given the continued decline estimated last month when exchange inflows began. to increase. However, the only silver lining here is that exchange outflows are still greater than total inflows, but nonetheless, the high amount of crypto assets sent by miners and other investors to exchanges is alarming.
For the entire crypto space, the exchange influx metric is considered a crucial indicator and is also closely watched. This is because any drop in the number of these coins entering exchanges can trigger a supply shock, causing the price to rise while still having enough buying pressure, and it could be the other way around.
When it comes to bitcoin, its value has plummeted nearly 70% after hitting its all-time high of $69,789 in November last year. It hit around the $18,000 mark, but at the time of writing, after posting a 5.32% gain in one day, it is currently trading at $20,703.
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