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Investors follow this as a general practice to burden off the assets that are not performing as expected, but crypto exchanges decreasing bitcoin may not be similar.
Since the start of this year, it’s been six months now, and still, the crypto market is experiencing consistent fluctuations and is unable to find stability. The massive sell-off in the crypto market was going on for several reasons, including skepticism regarding regulations, fear of DeFi projects clashes, breaking out of the war between Russia and Ukraine, the monetary policy of Federal reserves, etc. This had a massive boost due to Terra ecosystem collapse and recent increasing recession fears.
Cryptocurrencies all over the market, including top digital assets like bitcoin and Ethereum, have reached vulnerable positions breaking their anticipated support points of $20,000 and $1,000, respectively. Moreover, the overall loss in total market capitalization of the global crypto market could be labeled as the biggest wealth destruction instance in tech history, where it has lost more than $1.5 trillion worth of its value in just a few months. On Saturday, the global crypto market cap dropped to just $833 billion.
It wasn’t enough that on-chain metrics were also negative for bitcoin (BTC) as more investors are leaving the ecosystem, given the ongoing drop estimated last month when exchange inflows started rising. However, the only silver lining here is that exchange outflows are still more than total inflows, but still, the high amount of crypto assets sent by miners and other investors to the exchanges is an alarm.
For the whole crypto space, the exchange inflow metric is considered a crucial indicator and is also watched closely. It’s due to the fact that any drop in the number of those coins that are entering the exchanges can act as a trigger for supply shock, launching the price to go higher along with having enough buying pressure, and this could be vice versa.
As far as bitcoin is concerned, it has dropped by almost 70% in value after attaining its all-time high of $69,789 in November last year. It has reached about the $18,000 mark, but at the time of writing, after showing a rise of 5.32% in a day, it is currently trading at $20,703.
ALSO READ: When Billionaire Investor Mike Novogratz thinks that Crypto will take off?
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
