on the crypto
Last weekend, the price of Bitcoin (quotation BTC) plummeted below $ 18.000 due to major liquidations. The liquidity crisis in the cryptocurrency markets does not seem destined to end anytime soon. After Celsius Networks, the Solend decentralized protocol, based on Solana, is the protagonist of another liquidity crisis.
Although Bitcoin has partially recovered from Saturday's lows, investor confidence appears to be waning for now. As of press time, Bitcoin (BTC) is trading up 7,9% at a price of $ 19.963, with a market cap of $ 380 billion.
There have been some key developments on the chain, with Bitcoin going into capitulation, miners liquidating, and long-term holders taking losses. Furthermore, global macro developments will continue to weigh on BTC dynamics.
The main developments on the Bitcoin chain to keep an eye on
- Data provider on the chain, Glassnode, reported that the largest loss of USD-denominated Bitcoin in history has occurred in the past three days. “Over $ 7,325 billion in Bitcoin losses were blocked by investors who spent coins accumulated at higher prices,” it reads.
- Last week, long-term holders sold 20K-36K Bitcoin per day. Typically these are holders who have accumulated coins in the first half of 2021 or earlier.
- Below $ 23.000, long-term Bitcoin holders sold 178.000 Bitcoins, or 1,31% of their total assets. In this way, the total holdings of BTH have dropped to the level of September 2021. Glassnode explains that: "Some LTH of Bitcoin even bought the top of 69k dollars and sold the bottom of 18k dollars, blocking the losses of -75%" .
- After strong accumulation over the past couple of years, Bitcoin miners' holdings are now declining. Last week, Bitcoin miners liquidated 9.000 Bitcoins from their treasuries and currently hold around 50.000 BTC. With each decline, Bitcoin is slowly approaching block production costs for miners.
Here's what cryptocurrency experts say
Some market pundits are asking investors to remain cautiously optimistic. Bitcoin's breaking below $ 20.000 and its 2017 high is not a good sign; of course, the recent drop in prices could be due to forced sellers. Arthur Hayes, former CEO of the BitMEX derivatives trading platform, writes:
Over the weekend, as fiat binaries closed, $ BTC fell to a low of $ 17.600, a nearly 20% drop from Friday on good volume. It appears that a forced seller has triggered a stop run.
He also added that the recovery could come soon due to forced sales. However, he believes pressure from sellers could come in the future. On the other hand, the cryptocurrency market sees some of the major players struggling with major liquidity problems. Famous investor Mike Alfred notes that:
Bitcoin has not finished liquidating the big operators. They will take it to a level that will cause the most damage to the most overexposed operators, such as Celsius, and then suddenly rebound and rise once these companies are completely wiped out. A story as old as the world.
The global macro setup
The major US indices corrected between 20 and 30% from their highs following the massive price correction since May. However, the worst seems far from over. Welt analyst Holger Zschäpitz explains:
There's no hiding: Stocks and bonds together are on track for their worst quarter ever. Meanwhile, credit markets have also taken a hit. Bitcoin has lost over two-thirds of its value since it hit a high of nearly $ 70.000 in November (via BBG).
