Markets
Reasons Why the Cryptocurrency Market Dropped Today
With a 2% decline in global market capitalization, today marks a slow day for the cryptocurrency sector. As of now, the overall cryptocurrency market capitalization has dropped to $2.55 trillion after rising to $2.63 trillion previously. Furthermore, most cryptocurrencies are colored red in the heat map, confirming the market decline.
In the last 24 hours, Bitcoin price decreased by 3%, Ethereum price it lost 3% of its gains despite excess demand for the Ethereum ETF, and the rest followed suit. So, what was behind this fall? Let’s talk about it in this blog.
Why was the cryptocurrency market down today?
After bullish market conditions in March, the cryptocurrency market declined until recovering a few days ago. Market sentiments have also shifted from neutral to greedy indicative of fear and greedbut the decline pierced the bullish possibilities.
Mainly there were two reasons behind this decline; Mt Gox Bitcoin Transfer and Declining Bitcoin ETF Inflows. Let’s examine it.
Mt Gox transferred $9 billion worth of BTC
After almost 10 years of closure, Mount Gox, a popular cryptocurrency exchange at the time, made a transfer of 141,686 BTC ($9.3 billion in BTC) to three unknown wallets. This transfer is an attempt to return money to investors who lost their funds during the 2014 hack. However, these BTC worth $9 billion represented a huge amount, causing panic among cryptocurrency investors instead of relief for transfers.
Today, #MtGox moved all 141,686 $BTC($9.63 billion) to 3 new wallets and all 142,846 $BCH($66.4 million) in a new portfolio.
These transfers are in preparation for refunds.
The refund deadline is October 31, 2024.https://t.co/amB6lnQXtf
New wallets:https://t.co/Lw9fpadxEj… pic.twitter.com/mX5CZrhYvH
—Lookonchain (@lookonchain) May 28, 2024
The transfer took place in 13 parts, with the destination being the three anonymous addresses. The transactions ranged from $3 billion to $2.2 billion in BTC, causing the price of BTC to drop to $67,918.13 from its peak of $70,000, causing overall selling pressure in the cryptocurrency market.
Additionally, Mt Gox became the 11th largest BCH cryptocurrency address as one of its wallets moved 142,846 BCH tokens (worth $69.7 million) to an unflagged address.
Bitcoin ETF inflows have become stationary
The Bitcoin ETF remains steady after witnessing huge demand earlier in the month. Currently, the BTC ETF inflow rate is limited to $13.68 billion for the third consecutive day, slowing the market growth. This comes after surpassing a ten-day record of increases in ETF inflow data through the 25th, when recorded net inflows were $252 million. It points to growing investor concerns about short-term gains in the cryptocurrency market.
US-based Bitcoin spot ETFs have seen their highest net inflows in the past week since mid-March. pic.twitter.com/Z1yJIkQsyB
— Mads Eberhardt (@MadsEberhardt) May 27, 2024
However, investors are still bullish despite the cryptocurrency market crash Ethereum ETF approved plays the most significant role. With the discussion on upcoming ETF projectstraders are watching the altcoin rally with anticipation of an early bull run.
Keep reading Best Cryptocurrencies to Buy Under $2 to Make Millions