Bitcoin fell on Wednesday, continuing a sharp decline from the previous session after the transfer of a large volume of tokens to a popular exchange undermined sentiment due to the prospect of a large sale.
Writes UNN with reference to Investing.
The world's largest cryptocurrency, bitcoin, plummeted on Tuesday, suddenly halting its recent rise and dropping below the important $60,000 level. Along with bitcoin, prices for other cryptocurrencies also fell.
Bitcoin dropped by 5.8% to reach $59,481.0.
Market fears have increased following reports of a $1.88 billion bitcoin transfer. According to Whale Alert, a service in X that tracks large crypto transactions, about 30,000 bitcoins, equivalent to $1.88 billion at current exchange rates, were transferred from a cold wallet to the Binance crypto exchange on Tuesday.
Although it was later found out that it was an internal transfer between Binance wallets, the news still caused traders to fear a sell-off, as a large number of bitcoins were on the exchange. Usually, the mobilization of tokens on exchanges signals a possible sale, although this does not always happen.
The news of this transfer increased the pressure on bitcoin sales, which were already losing ground after the initial growth slowed.According to blockchain research firm Glassnode, net capital inflows into bitcoin have “cooled significantly” in recent months, helping to stabilize the token's price in the range of $50,000-60,000.
The report also notes that investor optimism about the launch of bitcoin-based spot exchange-traded funds has declined, and the market has reached a certain equilibrium between investors' profitable and unprofitable positions.
However, speculative activity around bitcoin has fallen sharply in recent months, leaving the spot market as the main price driver in the near term. Glassnode warns that periods of reduced speculative activity are usually preceded by “increased volatility,” which could indicate sharp fluctuations in the price of bitcoin in the coming weeks.
After hitting a record high in March, bitcoin remained in a narrow trading range as trading volumes steadily declined amid a drop in retail investor interest.
Prices for other cryptocurrencies also fell along with bitcoin amid a lack of positive signals for the market. The second-largest cryptocurrency, Ether, dropped by 8.6% to $2464.30, while XRP, SOL, and ADA fell by 4-5%. MATIC lost 10.4%, while the DOGE memo token fell by 6.7%.
Recall
The last time the price of bitcoin fell to $59 thousand because of, Mt Gox, the company appeared to have mobilized tokens worth about $2 billion, which raised concerns about new distributions from the defunct crypto exchange.