Markets
Reasons why the crypto market declined today
With a 2% decline in global market capitalization, today marks a slow day for the crypto industry. As of now, the overall crypto market capitalization has dropped to $2.55 trillion after rising to $2.63 trillion previously. Furthermore, most cryptocurrencies are stained red on the heat map, confirming the market decline.
In the last 24 hours, Bitcoin price decreased by 3%, Ethereum Price lost 3% of its gains despite overflowing demand for the Ethereum ETF, and the rest followed suit. So what was behind this drop? Let’s discuss this in this blog.
Why did the crypto market crash today?
After the bullish market conditions in March, the crypto market went into decline until recovering a few days ago. Market sentiments also shifted to greed from neutral fear and greed indexbut the fall punctured the upside possibilities.
There were mainly two reasons behind this drop; Mt Gox Bitcoin Transfer and Drop in Bitcoin ETF Flows. Let’s take a look at this.
Mt Gox transferred $9 billion in BTC
After almost 10 years of standstill, Mount Gox, a popular crypto exchange at the time, made a transfer of 141,686 BTC ($9.3 billion in BTC) to three unknown wallets. This transfer is an attempt to return investors who lost their funds during the 2014 hack. However, this $9 billion in BTC was a huge amount, causing panic among crypto investors rather than relief from the transfers.
Today, #MtGox moved all 141,686 $BTC($9.63 billion) for 3 new wallets and all 142,846 $BCH($66.4 million) for a new portfolio.
These transfers are in preparation for refunds.
The refund deadline is October 31, 2024.https://t.co/amB6lnQXtf
New wallets:https://t.co/Lw9fpadxEj… pic.twitter.com/mX5CZrhYvH
– Lookonchain (@lookonchain) May 28, 2024
The transfer took place in 13 parts, targeting three anonymous addresses. Transactions ranged from $3 to $2.2 billion worth of BTC, bringing the price of BTC down to $67,918.13 from the peak of $70K, causing general selling pressure in the crypto market.
Additionally, Mt Gox became the 11th largest BCH crypto whale address as one of its wallets moved 142,846 BCH tokens (worth $69.7 million) to an unmarked address.
Stationary Bitcoin ETF Flows
Bitcoin ETF goes flat after witnessing huge demand at the beginning of the month. As of now, the BTC ETF inflow rate is restricted to $13.68 billion for the third day in a row, slowing market growth. This comes after record-breaking ten days of rising ETF inflows data through the 25th, when recorded net inflows were $252 million. It indicates investors’ growing concerns about short-term gains in the crypto market.
US-based Bitcoin spot ETFs saw the largest net inflows last week since mid-March. pic.twitter.com/Z1yJIkQsyB
-Mads Eberhardt (@MadsEberhardt) May 27, 2024
However, investors are still optimistic despite the crypto market crash, and the Ethereum ETF Approval plays the most significant role. With the discussion about the upcoming ETF projectsTraders are keeping an eye on the altcoin rally with anticipation of an early bull run.
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