Bitcoin continued its downward trend, decreasing in value 55% from its all-time high of $69,044, which was reached in November 2021. The crypto was hovering around $31,000 in the morning of May 10 and was down 4.3% in the past 24 hours, according to CoinGecko. Now, 40% of holders are now underwater on their investments, CNBC reports.
However, a Glassnode report notes that while this represents a significant drawdown, it remains modest when compared to the ultimate lows of prior Bitcoin bear markets. Indeed, the bear markets of 2015, 2018 and March 2020 capitulated at lows between -77.2% and -85.5% off the all-time-high.
The Glassnode report added that during times of volatility and market stress, it is typical to see an influx of ‘urgent’ transactions, as investors seek to de-risk, sell, or re-collateralize their margin positions — and this week, there was a “burst of 42.8k transactions,”– the highest influx in transaction activity since mid-October 2021, Glassnode added.
In addition, during the sell-off this week, more than $3.15 billion in value passed in or out of exchanges, with a net bias toward inflows, which accounted for $1.60 billion — the largest aggregate exchange related volume peak since the market was made all-time-highs in October and November last year. It is also equivalent to the inflow/outflow levels at the 2017 bull market peak, Glassnode added.
This was echoed by CoinShares analysts, who said in their weekly report that digital asset investment products surprisingly saw inflows totaling $40 million last week in what they believe was investors taking advantage of the substantive price weakness.
“Bitcoin saw inflows totaling $45 million, the primary digital asset where investors expressed more positive sentiment,” CoinShares said.
In the midst of the downward trend, however, bulls will remain bulls, such as Binance CEO Changpeng Zhao (aka CZ), who tweeted on May 9, “It might be the first time and painful for you, but it’s not the first time for Bitcoin. It just looks flat now. This (now) will look flat in a few years too.”
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