Crypto Community Shocked by $319 Million Bitcoin (BTC) Loss: Major Impact on the Market and Investors
It has been a bearish week for the crypto market, with investors and people foregone about it. Coin Market Cap (CMC) data puts the total market capitalization at $2.04 trillion with a 0.39% loss over the past day. As the market continues to tumble, in a move that has seen more than $400 billion pulled from its total value, falling worryingly near historic lows not excluded, many are now palpably on edge.
The largest cryptocurrency by market capitalization, Bitcoin (BTC), has had a tough time during this phase. Bitcoin at $58,420 saw a 0.77% increase in price over the last 24 hours but has taken a (-9.41%) decline within the past month. Most of this slide is the result that it could not break higher to move upwards in a bullish run. Traders at home seem to have control of their market rumor mill.
Bitcoin is still stuck in the $58,000 range as gold drops against rising COVID-19 infections After a quick touch above $63,000 in mid-August, probably its most encouraging run at an all-time high this year, the bulls have stepped aside and a protracted consolidation has started. We have also seen increased selling pressure on the market as a whole, and even Bitcoin-based investment product are slowly fading away.
One of the key metrics reflecting the bearish mood is large outflows from digital asset investment products. Crypto investment products have had outflows of $305 million over the past seven days, according to research from Coin Shares.
What seemed to be a thematic trend hit the markets as we started 2021 with stronger-than-anticipated United States economic data injecting into this meltdown that pushed gold and silver lower from their highs. The prospect of large fiscal spending and the data reduced expectations that interest rates would be cut in short order, hurting market sentiment.
The negative sentiment around bitcoin products has continued to weigh on the space, which saw outflows of $319 million. This mass exodus of cash is one reason for the increasing polarity within trader and institutional sentiment.
The second-largest cryptocurrency by market cap, Ethereum (ETH), has suffered too with $5.7 million outflows of its own despite spot ETFs for the asset launched earlier this month. Though new, exotic investment products quickly appear to be losing their appeal in the face of rapidly deteriorating market conditions.
In conclusion, investors continue to be wary, and most in the slowdown will largely avoid participation as pessimism continues to resist market volatility. Dismal economic data, heavy outflows in crypto investment products, and cryptocurrency majors such as Bitcoin (BTC-USD) and Ethereum (ETH-USD) have been unable to reclaim their zeal for highs, which has left the market overextending a perfect storm.
This is worrying for the crypto community, as their short future of appearances seems bearish and is likely to result in further losses, assuming that they may continue. Adding to the uncertainty is that ever-present concern, while a $2 trillion total market cap support break would make many wonder just where the bottom might be for this particular downturn.
