The total market capitalization of the cryptocurrency market dropped from an all-time-high $835 billion to $648 billion, a decrease of $187 billion, or 24 percent. This drop is comparable to the Dow Jones Industrial Average’s Black Thursday in 1929, when the market dropped by 22 percent when the prices of stocks fell. The drop in cryptocurrencies, however, has been more significant due to the fact that the market had inflated to such a degree that the recent dips have been even more dramatic.
The cryptocurrency market is not for the faint of heart. It’s certainly not for the short of attention either. Were you to peer over the shoulder of an active trader, you would quickly realize that there are plenty of reasons to avoid the market entirely. In fact, the recent drop (in prices) has been dubbed “Black Thursday,” and many are reeling from the effects. While some are comparing these losses to the Black Monday of 1987, others are trying to parse the meaning of the Coinbase outflows. Transaction volumes are up for this popular exchange, and many are starting to wonder what all of this means.
One of the biggest surprises from yesterday’s Bitcoin (BTC) price drop has been the relatively low outflow from major exchange Coinbase. Many had expected investors to instantly jump ship from Coinbase-based exchanges to other platforms, but for the most part, that flow has not materialized. While there has been some individual outflow, it has not been enough to significantly change the in and outflows from Coinbase, from which we can conclude one of two things: either investors are confident that the price will soon recover, or they are moving their money between exchanges to take advantage of the price differences. Announcement: We’re happy to announce that we’ve opened our first official moonbase office in San Francisco, California, in addition to our. Read more about bit coin price and let us know what you think. Elon Musk and COVID-19 have something in common: Both have caused investors to sell off their bitcoin (BTC) holdings – at least once – in a panic. In the previous six days, similar numbers have risen again, while Musk doubled down on his opinion that bitcoin is taking a toll. This weekend, the billionaire got into a controversy on Twitter with prominent crypto currency advocates, including podcaster Peter McCormick, when he claimed that his favorite token, Dogecoin (DOGE), was superior to bitcoin. It’s horrible problems like this that make me want to switch to Doge. – Elon Musk (@elonmusk) May 16, 2021 At one point, Musk almost admitted that he would have Tesla divest the $1.5 billion investment it made in bitcoin in February. Meanwhile, bets on the flagship cryptocurrency continued to drop with each tweet from Musk. First they reached $50,000, then $45,000 and finally a low of $42,000. Musk later clarified that Tesla had not sold its shares in bitcoins. To clarify the speculation: Tesla hasn’t sold a single bitcoin yet. – Elon Musk (@elonmusk) May 17, 2021 But his explanation did little to offset the downward trend in the bitcoin price. The cryptocurrency extended its downward correction to more than 35% from its all-time high of nearly $65,000. It was also one of the fastest and deepest top-down pullbacks in recent cryptocurrency history, and indicators on the blockchain showed that its impact on market disruption was as strong as the March 2020 Black Thursday collapse caused by the coronavirus pandemic. Meanwhile, analytics platform Glassnode reported a drop in revenue from the supply of bitcoins in circulation in its own metric. The BTC delivery rate in profit (7d MA) metric stood at 81.122 in London on Tuesday morning, the lowest since October 2020. Performance was also poor during the March 2020 crash, when bitcoin fell more than 50%. Percentage of earnings corresponding to operating stocks, averaged over 7 days. Source: Glassnode Other indicators on the blockchain point to similar levels between the current Musk-led bitcoin price collapse and the March 2020 coronavirus panic. For example, the bitcoin transfer volume tracker on Glassnode showed a spike in BTC inflows on all exchanges. The size was similar to the inflow at the March 2020 sale and distribution of the PlusToken Ponzi scheme in 2019. Net volume of bitcoin transfers to/from cryptocurrency exchanges. Source: Glassnode Greater inflows of BTC indicate a greater likelihood that traders will sell these tokens for other assets, including fiat and altcoins. Conversely, higher outflows indicate that traders want to hold BTC longer.
Institutional and private sentiment
Meanwhile, Glassnode’s bitcoin transfer volume data showed two notable investment prospects between retail and institutional clients. In its weekly newsletter, the analytics platform presented its observations based on input and output data collected from the world’s two largest cryptocurrency exchanges: Binance and Coinbase. Binance is a non-US company that mainly attracts small traders and investors from all over the world. At the same time, Coinbase is better valued by US institutional investors. Glassnode noted that Binance was the biggest beneficiary of bitcoin inflows during the market crash under Musk. This is further evidence that recent fund inflows are likely caused by both new market participants (panic sellers) and possibly a rotation of capital to other crypto assets, Glassnode writes in a weekly note. Ki Young Joo, CEO of CryptoQuant, a South Korean blockchain analytics platform, also noted that most BTC inflows came from Binance, adding that this is not necessarily a bearish signal. I’ll wait for the inflow signal to cool down, he added. Net volume of bitcoin transfers to/from Binance. Source: Glassnode On the other hand, Coinbase has seen a larger outflow of new bitcoins since the cryptocurrency crossed the $20,000 mark last year. This trend continued this week, showing that institutional investors are absorbing the selling pressure in the retail market. Bitcoin balances on all exchanges vs Coinbase vs Binance. Source: Bybt.com.
In other words: Wealthy investors bought bitcoins at the bottom, while average investors sold them under Musk’s influence. Don’t listen to what they say, early-stage investor Anthony Pompliano said Monday in a note to clients. He added: Look at what they do with their money. Elon Musk and Tesla understand their future reliance on bitcoin. I wouldn’t be surprised if they are buying more bitcoins at a discount now, or at least planning to buy more in the future. Pompliano added that bitcoin remains the best-performing macro asset, a predator that has done much better than stocks, bonds, real estate and commodities. Twitter CEO Jack Dorsey, whose payments company Square added bitcoin to its balance sheet to ease inflation fears, also said Friday that his team will always work to improve bitcoin. These comments contrast with Musk’s support for Dogecoin. Veteran investor Paul Santos wrote in an article on the Seeking Alpha site that Tesla’s CEO may be out to make money out of thin air with the so-called crypto currency euphoria.As all eyes remain on the cryptocurrency market, a new report by Diar suggests that inflows into Coinbase, the largest cryptocurrency exchange in the U.S., have dropped to the lowest level since December 2017. Meanwhile, according to research by TheTIE, the recent decline in bitcoin prices is comparable to the infamous Black Thursday, when the Dow Jones Industrial Average plummeted nearly 23 percent. However, the report noted that the recent bearish price action in the cryptocurrency market is not the same as that of the 1987 stock market crash because the Dow Jones was falling due to the crash in the bond market. TheTIE suggests that the crash in the cryptocurrency market is similar to Black Thursday because a notable difference in the bitcoin market today is the presence of a. Read more about bitcoin and let us know what you think.
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