Bitcoin continues to decline. After a sharp drop last week, BTC has lost more than 16% in four days. In this process, BTC fell from $ 39,500, where it was traded, to $ 32,700. Similarly, many altcoins also took great damage. The total value of the cryptocurrency market also fell by $300 billion. Here are a few possible reasons for the decline:
Macroeconomic Uncertainties
Over the past year, governments have printed huge amounts of money to “get rid” of the damage done to the economy by the coronavirus. This move resulted in high inflation and caused inflation to climb to 8.5% in countries such as the USA. The fight against high inflation pushed the Fed to increase interest rates, and lastly, 50 basis points of interest were raised in the past few days.
The Amount of BTC Sent to Exchanges Increases
According to Glassnode data, the 7-day moving average of the amount sent to exchanges reached 1,755,021 BTC, the highest level of the last 3 months. This indicates that major players are exiting the market.
Technical Outlook Issues
As many market commentators have pointed out, Bitcoin’s technical indicators are not looking bright either. As we have mentioned before, Bitcoin closed the red for 6 consecutive weeks for the first time since 2014; opened the seventh week with a decline.
The Fees to Reward Ratio metric also dropped significantly from its all-time high. Analysts interpret this as a bear market approaching. The 7-day moving average of the number of addresses in loss also reached the highest level in the last 2 years.
Bitcoin is trading at $32,865 at the time of publication.
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