Bitcoin struggles to stay above $20,000 as Bitcoin balance on exchanges plunges to a very low level
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Answer Bitcoin struggles to stay above $20,000 as Bitcoin balance on exchanges plunges to a very low level
Despite breaking the critical support at $20,800 and dropping below, Bitcoin managed to recover and maintain its position above the $20,000 psychological region for most of the week.
Last week, the largest cryptocurrency attempted a comeback after a devastating sell-off on August 19th, but only managed to regain the $21,800 level before dropping further.
Over the past four days, bitcoin has been hovering between $20,500 and a multi-week low of $19,500, even as the Fed’s hawkish stance and high inflation in Europe continue to pressure investors.
For now, most fundamental metrics continue to suggest short-term weakness for Bitcoin with investors looking for exit liquidity at every available opportunity.
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According to Glassnode, “Bitcoin is barely on hold with the performance of the cryptocurrency user base remaining subdued.
Glassnode wrote in its latest weekly newsletter:
The current Bitcoin user base is performing poorly at best, and price action is still notably weak, even as the outlays of the old coins decline.
According to the report, Bitcoin investors are still stuck in a realized loss streak of about 220 million/day net losses.
But the situation improved compared to the previous downturns, which saw billions of dollars recorded.
Investors also continue to withdraw their bitcoins from exchanges, despite the drop in prices.
According to Santiment data, the total number of bitcoins on exchanges has fallen to just 1.74 million which represents a systematic drop of more than 40% since March 2020.
The “Santiment” report noted:
During downtrends, it is common to see long-term traders make up a larger percentage of the total supply being held.
It can still be argued that the cryptocurrency market is in its darkest stages of decline and that Bitcoin could see a sustained rally if fundamentals turn green.
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As of the time of writing this article, Bitcoin is trading at $2,011 after a 0.71% increase in the last 24 hours.
Read also:
Eurozone inflation hits all-time high… Will the cryptocurrency market suffer more?
How many months does it take Bitcoin to end the bearish momentum?
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