Bitcoin: How Are Investors Reacting to BTC Breaking Through $30,000?

Bitcoin didn’t lead the market to a downturn in the first place, as there were two reasons for the cryptocurrency price crash. One was heightened fears of rising inflation and a potential recession, and the second was the decline of the largest decentralized unsecured stablecoin, TerraUSD (UST).

Bitcoin sets new records

The latter sold nearly $3 billion worth of BTC in five days at the Luna Foundation Guard Reserve, leaving a $10 billion reserve balance of $110.82 million.

In the former case, it appears that investors are starting to treat Bitcoin as a risk-on asset, so most investors seem to have sold Bitcoin to protect their profits or minimize losses.

This makes sense as King Coin and the stock market now share a correlation of nearly 0.58, according to data obtained from CoinMetrics as of April 2022.

Correlation between Bitcoin and the S&P 500 | Source: CoinMetrics

Nevertheless, investors sold around 100,000 BTC in five days, reaching $3.17 billion. The move made sense as yesterday was the day when Bitcoin holders experienced the most losses in Bitcoin history.

Given the network loss of over 61,000 BTC worth over $1.94 billion, investors were not expected to be very optimistic.

Bitcoin BTC 17.03.08 11 May 2022

Loss of the entire Bitcoin network | source: Santiment – ​​AMBCrypto

This lack of support could be seen in their feelings. Even those who bought bitcoin for less than $30,000 were discouraged yesterday because it takes time to recover from such a low point and loses profits. As a result, the lack of optimism for Bitcoin has fallen to its lowest level since February 2020.

Bitcoin BTC 17.02.52 11 May 2022

Bitcoin investment sentiment | source: Santiment – ​​AMBCrypto

In fact, even Bitcoin holding whales reached their highest point of activity when more than $100,000 of transactions peaked at $3.5 million, the most notable since January of this year as BTC broke through the $30,000 mark.

BTCUSD 2022 05 11 17 02 28

bitcoin price action | Source: TradingView – AMBCrypto

It will take some time before we see positive activity from them as the wider market is currently in absolute fear. The fear index hit its second low this year, and it is best for investors to hold on to the asset until some optimism returns from the market.

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Crypto Fear and Greed Index | source: Alternatives

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