Cryptocurrency investors in the price of Bitcoin on June 22 (Bitcoin) Fell to a 6-month low of $28,805.A break below the critical $30,000 seems to be a major buying opportunity, but the data shows that institutional investors are continuing their The longest consecutive sell-off since February 2018.
Data from Cointelegraph Markets Pro with Transaction view Showing that June 21 fell below US$32,000 and rose above US$33,000 is just a precursor to Tuesday’s trend. BTC was hit hard at the beginning of the trading day, falling to a low of US$28,805, and then rebounding to US$32,000 at the time of writing.
Ether (Ethereum) Was also hit, falling 15% to a low of $1,700 after the bulls failed to hold the $1,900 level.Unless an important source of motivation emerges to help the market turn for the better, the current trend will continue to be negative, which proves Shorts dominate Bitcoin’s $2.5 billion option expiration June 25.
Warning signs provided by data
Although the price movement on June 21 may be unexpected to many people, many indicators hint at the downward trend in prices and the possibility of further declines.
According to Glassnode’s data, the number of active addresses in Bitcoin and Ethereum dropped sharply from the highs in May. Active BTC addresses dropped by 24%, while active Ethereum addresses dropped by 30%.
The decrease in network activity has led to a significant drop in the value of USD settled on the chain, with Bitcoin dropping by 63% to USD 18.3 billion every day, and Ethereum dropping by 68% to USD 5 billion every day.
The decline in transaction activity and transaction value on the Internet can be explained by a decline in overall enthusiasm, because investors who bought at the April and May highs must now decide whether to sell at a loss to avoid the possibility of further decline or hold , I hope the market will improve eventually.
China’s crackdown triggers panic
Another major source of the market downturn that has been going on for several weeks is China’s crackdown on the country’s cryptocurrency mining business. This caused the record hash rate to drop significantly to the level of September 2020.
Although the closure of a large number of mines in China and the resulting decline in computing power are a negative development in the short term, Delphi Digital’s position is that “from a medium to long-term perspective, this should be healthy for Bitcoin” network, because Hash rate concentration risk is significantly reduced. “
Delphi Digital stated that since China began cracking down on mining, the concentration of hash rates in Chinese mining pools has been declining, which has allowed smaller mining pools to “increased their share from 30.81% to 37.96% in the past 30 days.”
In addition to suppressing mining, China also reiterated that banks should not support cryptocurrency-focused off-exchange businesses, which led to “Chinese miners and investors panic”, resulting in a sharp drop in the supply of BTC stored in miner addresses.
Since China is unlikely to change its current course of action on cryptocurrencies in the short term, investor uncertainty and volatile price actions may continue in the short term.
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