The recent decline in Bitcoin price gained momentum on February 6 and the price fell below the $60,000 level. With this move, Bitcoin lost over 52 percent in value from its peak. It is stated that this correction in the markets has significantly increased the risk aversion tendency of cryptocurrency investors and professional traders.
Sudden Bitcoin Entry to Stock Exchanges Accelerated Sales
There was a significant movement in the cryptocurrency markets on February 5. That day, 25,000 Bitcoins were deposited to Binance, the world’s largest centralized cryptocurrency exchange by transaction volume. On the other hand, 17,600 Bitcoins were entered into the US-based Coinbase Advanced platform, which is frequently preferred by corporate and professional investors. Compared to the previous month, logins to Coinbase Advanced increased fivefold.
The transfer of such a large amount of Bitcoin to exchanges in the short term indicates that the tendency to sell or hedge has increased. The simultaneous peak of inflows on two different platforms, both individual and corporate, indicated that all investor groups were involved in the decline process.
Selling Pressure Reduced After the Fall
Following the intense transfer wave, there was a remarkable decrease in inflows to the stock exchanges. While daily Bitcoin entries to Binance decreased to 8,400, entries to Coinbase Advanced decreased to 1,400. There was a nearly threefold drop on Binance and a tenfold drop on Coinbase Advanced.
This decrease in the amount of Bitcoin sent to exchanges shows that the tendency to return to cash, which started with panic, has eased. With the decrease in trading volume, short-term selling pressure has also decreased significantly.
Technical Transformation and Psychological Limit in the Market
Falling below the $60,000 level, Bitcoin broke an important support point, both technically and psychologically. This retreat brought about a serious loss compared to the previous peak. On the other hand, the rapid contraction in the amount of Bitcoin transferred to exchanges indicates that the harshest risk aversion phase is over.
If the current trend in the market continues and inflows to the stock exchanges remain under control, the correction process that started with forced sales may evolve into a more balanced environment. In order for the moderate recovery of recent days to continue, it is considered critical for Bitcoin to maintain its permanence above $ 60,000 again.
Volatility in the cryptocurrency market remains high. However, the decrease in Bitcoin transfers to exchanges leads to comments that the panic in the market has decreased and some balance has begun to be approached.
