Learn one of the reasons why Bitcoin dropped to the $21,000 level

Learn one of the reasons why Bitcoin dropped to the $21,000 level

The content site is one of the sites that provide the service of answering general questions and solving puzzles and crossword puzzles

Where the content site is primarily interested in answering your questions in all areas, including solving puzzles and crossword puzzles

Answer Learn one of the reasons why Bitcoin dropped to the $21,000 level

According to data shared by on-chain analyst Willy Wu, Bitcoin’s drop to $21,000 is mostly due to selling by institutional traders via 3AC, but there is some positivity.

According to analyst Willy Wu, these sell-offs were correlated with a negative net inflow of cryptocurrencies into exchanges, which may indicate that the majority of market participants had entered an accumulation mode and were actively buying cheap coins to store in their cold wallets while prices were falling.

Read:The Stellar currency rose by 20% after it was announced that half of its supplies were burned

At the beginning of this summer, we did not see inflows from centralized platforms, as traders were mostly providing additional liquidity to fund their short positions while not actively buying any coins at their absolute lows.

Regardless of the positivity about the net inflow of bitcoin into exchanges, the current move to $21,000 is a manifestation of the problems surrounding the cryptocurrency market caused by the negative macro environment for risk-exposed assets like bitcoin or ethereum.

Unfortunately, it is not yet clear whether the downtrend will continue as there are no signs of Bitcoin bottoming.

Also one of the main reasons for the decline of Bitcoin in addition to the selling carried out by institutions is the rise in the DXY dollar index.

As the rise of the US dollar against the FX bracket is one of the main sources of pressure on the digital asset market.

With a successful bounce off the 50-day moving average, DXY reached new highs after a recent correction that launched a rally in the stock and digital asset markets.

Looking at the inverse correlation between the assets, it becomes clear that with the current price-raising cycles, a recovery in the cryptocurrency market is unlikely, at least for the time being.

Read:Beware: A scam Cardano ADA wallet is being marketed on Discord

Analyst Willie Wu predicts that the crypto market may enter a long-term winter as we saw in 2018.

Read also:

FTX revenue up 1000% in 2021 and 2022 looks like an even better year!

Bitcoin Acceptance by Two Tech Giants in Ukraine…Details Here

And you can ask questions on the content site through the word “Ask a question” at the top of the site, where we answer your questions in a short time

Previous post
After Bitcoin lost 12% of its value per week…the total value of the crypto market is struggling to stay above $1 trillion
Next post
Despite the price drop…One of the Bitcoin indicators is very bullish