Bitcoin has reached its lowest point since December 2020. what to expect here


On May 12, BTC fell to its lowest value since December 2020 at $26,350. There are odd parallels between this clash and the mid-season crypto collapse of May-June 2021.

In both crashes, BTC price fell below the most important support level of $30,000. It reverted from $29,800 in June 2021, but dropped further to $26,300 this time.

Again, in both cases, several macroeconomic factors came into play that shaped Bitcoin’s fate. Spring 2021, Chinese banks to prohibit Cryptocurrency services of domestic financial institutions. Elon Musk created even more trouble after ‘reversing’ his decision to use Bitcoin for Tesla payments. These factors, combined with the peak of the COVID-19 pandemic in major economies, caused BTC prices to plummet.

The current collapse is also the result of greater macroeconomic and geopolitical headwinds. The Russian invasion of Ukraine and regulatory issues during a period of global inflation have plunged the cryptocurrency market into chaos. The price of Bitcoin is further pushed down by Fed regulations and legal ambiguity on crypto assets in major economies.

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After the recent crash, investors are rushing to drain their holdings through exchanges, along with many who are taking losses. Addresses lost reached an all-time high of 16,967,726. This peak was observed earlier, on March 19, 2020, two years ago.

Source: Glassnode

Investors tend to neglect their assets in market conditions and encourage them to liquidate. This reduced the following metrics: The number of addresses holding more than 1,000 coins was 2,234, a one-month low. Even more surprising is that this low was recorded only on May 11th.

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Source: Glassnode

The exit rush has caused a surge in transaction volume on the Bitcoin network. Trading volume reached 175,146.8 BTC, a four-year high. This is a re-breaking of the previous high set on May 11th.

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Source: Glassnode

Meanwhile, Scott Melker, host of The Wolf of All Streets podcast, said “the whole market is churning,” speaking of the significant impact of a bear market. that said,

“I think the market is in a completely irrational panic. The pendulum, as always, was swept away in extreme fear. This makes people sell their assets on or near the floor.”

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