Possible reasons for the decline of Bitcoin
In the past hours, we have seen Bitcoin drop to its lowest levels, which is followed by most of the altcoins.
In addition to the jittery global economic backdrop, Ethereum's long-awaited "merger" upgrade has finally emerged as a kind of news selling event.
The total market capitalization of the crypto market has fallen to $930 billion, and the trading volume has reached $74 billion in the past 24 hours.
Major currencies such as Bitcoin and Ethereum fell below $19,000 and $13,000 respectively, posting double-digit losses in the past day alone.
For the partial recovery to take place in the past few hours, the price of Bitcoin is back to the levels of $ 19 thousand and Ethereum to the level of $1,300 at the time of preparing this article.
With palpable tension across global markets ahead of a key interest rate decision by the Federal Reserve due this week, the market turmoil is likely to continue.
Investors will need to prepare to mitigate the potential damage.
Investors need to prepare for further declines:
According to CryptoQuant data, there are two recent signs of a strong bearish signal.
The movement of more than 5,000 bitcoins by the long-term bitcoin holder, which has held steady in portfolios for seven years, could mean an additional downward trend in the near term.
She told South Korea-based CryptoQuant:
The fact that the long-term owner has moved bitcoin means that there will be an unusual price movement in the future.
On the other hand, the dominance of Ethereum may exacerbate the downward pressure on Bitcoin, which has been rising recently.
It is worth noting that the real increase in the price of the altcoin could come after a strong rise in the price of Bitcoin.
When the flow of the latter is accidental, the excessive movement of Ethereum creates a bubble.
As such, Ethereum's increased dominance of over 20%, in particular, could provide good timing for entering a short position.
Bitcoin whale activity:
In recent months, whale activity surged just before Bitcoin broke the psychological $20,000 level.
In fact, more and more idle cryptocurrencies are being moved around.
August alone saw the dormant Bitcoin awaken, which could signal long-term holders of the coin to join the sell-side and start offloading their positions to avoid further losses.
Usually, such a move is considered the first sign of surrender among investors.
Old wallets have been involved in moving thousands of bitcoins in a short period of time, causing huge pressures on the market.
These transfers can also be part of the redistribution of funds.
On the other hand, miners joined the bearish atmosphere.
August is the fourth month in a row that miners have negative net flows.
Reports indicated that the net inflow last month amounted to 21.3 thousand bitcoins.
All of these factors add insult to injury and make the anticipation more intense, especially with the advent of a busy week in which data and economic decisions are revealed that directly and indirectly affect the prices of cryptocurrencies.
