Here are three main reasons why Bitcoin and the crypto market are bearish today

On-chain analytics platform CryptoQuant has identified three crucial factors contributing to the market’s continued decline, including the capitulation of Bitcoin miners.

The crypto market is struggling with severe sales, erasing the gains of the last bull wave. This slowdown has persisted for weeks, with Solana and Cardano each losing more than 13% in their weekly performance.

The meme coin market performed even worse, with Shiba Inu plummeting more than 20% in seven days. This sharp decline has caused significant distress among market participants, driving positive sentiment toward large-cap cryptocurrencies to its lowest level this year.

As the downward pressure shows no signs of abating, market participants are pondering the factors behind this trend. IT Tech, an analyst at CryptoQuant, recently identified three key elements that are contributing to the recent market crash based on on-chain data.

Bitcoin miners dumping stakes to cover costs

Firstly, the report highlights that the market-wide collapse was influenced by developments around Bitcoin, although BTC itself experienced a less severe price drop.

A major contributing factor is Bitcoin miners dumping more BTC than usual. This sell-off results from miners struggling with lower revenues, compounded by the last halving cycle which further halved profits.

With Bitcoin Miner Revenue Declining at 55%, they were forced to sell more earned BTC to cover operating costs. For example, in an update, analyst Ali Martinez highlighted that miners unloaded 1,200 BTC, worth approximately $80 million, in a single day.

Meanwhile, experts argue that the current miner capitulation is coming to an end, projecting a smoother uptrend for BTC in the near term.

Stops in stablecoin issuance

Additionally, CryptoQuant noted a decrease in USDT issuance and USDC stablecoins, identifying this as another factor contributing to the recession. The report argued that the lack of stablecoin issuance indicates an absence of new money entering the market.

Notably, tracking platform Whale Alert last drew attention to a significant Tether treasury USDT transfer four weeks ago.

Extension of Bitcoin ETF Outflows

The last factor influencing the market decline is the observed outflows from Bitcoin spot ETFs. For example, at the end of yesterday’s negotiations, the U.S. Bitcoin ETF spot market recorded outflows worth around US$146 million, marking the third consecutive day of negative flow trading.

While the negative was influenced by Fidelity and Ark Invest, other issuers such as BlackRock, WisdomTree and Valkyrie recorded zero intraday inflows on Monday.

Bitcoin could fall to $62,000

The report concluded that with current conditions causing fear and triggering selling among short-term investors, the support level at $62,400 should be watched closely.

This level represents the average realized price for short-term holders and is expected to help stabilize prices in the short term. At press time, Bitcoin hovers around $64,925, down 3% since last week.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.

-Announcement-

Fuente