Analysts see two reasons why Bitcoin continues to lose market capitalization in recent hours, despite the rally. What are they and what will happen in the coming hours?
The sinking of the bitcoin (BTC) The market is worried. The leading cryptocurrency has plummeted in recent days and even touched $54,000, although it managed to recover to $57,000. Specifically, the Bitcoin bloodbath has caused the cryptocurrency market to lose $170 billion in market capitalization on Saturday.
To put it into perspective: The market cap of Tether (USDT), the largest stablecoin and the third largest token in the entire market, is $112 billion. Ethereum (ETH) is worth $350 billion: just over double.
What is the reason for the sharp decline?
These falls, the analysts explained, are due in part to good measure that Mt. Gox has started its refund program. After several days of waiting, the defunct crypto exchange has begun returning some of the bitcoin stolen in a 2014 cyberattack. According to data from blockchain analytics firm Arkham Intelligence, Mt. Gox moved about 47,228 BTC, valued at $2.6 billion at current market prices, to a cold wallet at 2:27 a.m. Friday.
Through this process, the company will return, in cryptocurrencies alone, about 140,000 BTC ($7.7 billion) and another 143,000 bitcoin cash tokens (BCH; 41.6 million). The market fears that many of the investors who recover their BTC decide to sell it immediately, causing an excess of supply and, consequently, a further drop in prices. The fears are not unfounded: at the end of 2014, Bitcoin was barely above $300 and at the time of the hack it was trading at around $600.
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Courtesy: In Colombia
Antonio Ernesto Di Giacomo, market analyst at XS.com, noted that There are other factors that are damaging the cryptocurrency. These include the recent weakness of the US dollar, the sell-off by large whales (the largest holders of bitcoin) and the recent sales by the German government, which is creating an oversupply in the market. “EThese strategic moves by major market players have added another layer of volatility and uncertainty.“, he claimed.
“This development highlights the vulnerability of the cryptocurrency market to external influences and the importance of trust and stability in this rapidly evolving sector. Attention will be focused on how events unfold in the coming days and weeks,” the strategist concluded.
Source: Ambito
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