Bitcoin seems to be in a bear market, and most of the market is on a downtrend. The price of Bitcoin seems to have erased any gains made since the beginning of the year, and unlike previous bears, the current one is attributed to increasing selling activities by whales.
Bitcoin whales are selling
BTC whales have been known to buy when the market is down, but the current bear market shows a contrary trend. BTC whales could be exiting the market, and they are dumping their holdings on centralized exchanges.
The number of Bitcoin whales is recording a notable decline. According to Glassnode, exchange inflows of over 1.7 million coins have been reported, the highest in three months. The whales dumping are those holding more than 1000 coins.
The high inflow of BTC on exchanges could be attributed to whales selling their coins as they brace for a market dip. The price of BTC has been on a sharp decline over the past week. At the time of writing, the primary cryptocurrency was trading at a six-month low of $33,627, according to CoinGecko.
Following the price dip, the Bitcoin Fear and Greed Index has also recorded a sharp decline. The index has dipped to 11, showing the market is in “Extreme Fear.” However, despite the negative market sentiment, Bitcoin’s daily transactions have maintained an average of around $30 billion. BTC daily transactions have been at around this figure since January this year.
Bitcoin traders are bearish
Crypto Twitter has been filled with the debate of whether the crypto space is in a bearish or bullish state. While some expect that the market will recover, the majority believe that BTC is officially in a bear market.
“Checkmate”, an on-chain analyst at Glassnode, posted a tweet saying that most investors were waiting for the formation of a “capitulation wick.” This wick was formed when the price of Bitcoin made a massive and sudden drop. Such a wick was formed in March 2020 when Bitcoin’s price dipped by 43% in one day.
Many factors are triggering the current downtrend and causing Bitcoin’s price to fail to make a recovery. The selling behaviour of whales is causing a lack of confidence among retail investors. Retail interest in Bitcoin has been notably down. Increased retail interest in Bitcoin and other cryptocurrencies was behind the massive rally to record highs early last year.
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