Altcoin prices plunged while Bitcoin saw $ 34,000 gold

The seeds of Fear, Uncertainty and Doubt (FUD), which caused a decline in the price of many altcoins as well as the Bitcoin (BTC) currency, created intense selling pressure as of May 21.

In China, for the second time in less than three weeks, regulators’ rhetoric to reduce Bitcoin mining and trading has spread. It was also reported in the media that authorities in Hong Kong are considering banning individual traders from trading cryptocurrencies.

Data from Cointelegraph Markets and TradingView shows that the Bitcoin (BTC) bulls held the $ 40,000 support level before the announcement from China, but quickly lost that level and had to concentrate again on the $ 36,000 support before further negativity emerged.

4-hour chart of the BTC / USDT pair. Source: TradingView

As the change seen in the market on Thursday brought fears of a cryptocurrency winter to the surface, some analysts, including Jarvis Labs co-founder Ben Lilly, said that “we have not yet recovered from the chaos” before the fall on Friday in evaluation they were found.

Activity seen in whales’ wallets hints at the possible level of support at $ 39,931. Because there is a heavy influx of whales in this region.

Activity in stock exchanges also increases during sales

As Ashwath Balakrishnan’s Delphi Daily report highlighted, cryptocurrency exchanges played a major role in Wednesday’s price action.

Balakrishnan said that about $ 100 billion worth of spot trading was made on the Binance exchange alone, and over $ 10 billion was recorded on decentralized exchanges on the Ethereum (ETH) network.

Daily Ethereum decentralized exchange (DEX) trading volume. Source: Delphi Digital

Individual traders were in a rush to exit the market. While $ 10 billion was traded on all DEX platforms, $ 6 billion was traded on Uniswap (UNI) alone.

According to S2F Capital managing partner and chief investment officer, Micah Spruill, during this week’s price correction, approximately $ 9 billion of assets were in liquidity, similar to what happened in March 2020.

Money liquidations in central exchanges. Source: Coinalyze

Spruill also highlighted that Bitcoin moved from the exchange on May 19, when compared to net exits in the past few years, reaching historic levels, the highest in dollar terms in history.

In order to better understand the current sentiment of traders in the market, he pointed out that the number of individual wallets continues to increase despite the turmoil in the market. He described the increase in bottom price purchases by individual investors as a sign of “adoption”.

Spruill said:

“Despite all this downturn, the number of new assets is increasing. It also indicates that we are not seeing the peak of the bull market, but rather a local peak in a large bull market.”

Altcoins crash again

Pressure on bitcoin has also spread to the altcoin market, with most of the top 100 cryptocurrencies turning red.

Daily cryptocurrency market performance. Source: Coin360

The overall cryptocurrency market cap was $ 1.4 trillion at the time of this news publication, and Bitcoin’s dominance was at the level of 44.3 percent.

The opinions and comments expressed here belong only to the author. It may not reflect Cointelegraph’s views. Every investment and trading transaction involves risk. When making your decision, you should do your own research.

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