Markets
Top reasons why the crypto market is bearish
The drop in overall trading volume to $63.63 billion indicates a sluggish crypto market, but the rest of the factors also indicate the same. TV fell 17% in just one day, and overall crypto market value fell to $2.3 trillion. Along with this, the fear and greed index also moved away from the bulls.
The result of the market crash is the declining prices of Bitcoin and Ethereum, along with many other major cryptocurrencies. Bitcoin the coin is trading at $62,309.95 after a 2% drop, and Ethereum Price is trading at $2,999.41 after falling 2.2%. The decline appears to continue for now, bringing the rest of the cryptocurrencies down too.
Reasons behind the current crypto market decline
The crypto market has been moving sideways for weeks and has only shown slightly less than outbreak in the last days. But this was also disturbed by today’s fall initiated by the new regulatory issues in the crypto market. Other than that, a decline in the Bitcoin Futures ETF and exchange inflows dragged down investor sentiments, creating bearish situations.
SEC interfering in the crypto market
Robinhood became the SEC’s next target when the exchange received Well warning of these US regulators. Robinhood recently revealed this information in a archiving on Monday and said:
On May 4, 2024, the RHC received a ‘Notice of Wells’ from the SEC staff (the ‘Team’) stating that the staff informed the RHC that it had made a ‘preliminary determination’ to recommend that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934, as amended
As a result, exchange decided to suspend any of the cryptocurrencies that have been called or named as securities by the SEC. This isn’t the first time Robinhood has removed support for cryptocurrencies. Previously, when the SEC was involved with Binance and Coinbase, calling Cardano, Solana and Polygon as securities, Robinhood immediately removed these three cryptos.
Consecutive Bitcoin Futures ETF Outflows
Last week was the fourth continuous week witnessing an increase in outflows in the crypto market, where AUM (Assets Under Management) decreased by $251 million. These outflows continued despite the Hong Kong crisis ETF Bitcoin and Ethereum to throw. Those maximum outputs were noted in the case of Bitcoin, when $284 million was withdrawn from the funds.
This continuity in outputs brought the popularity of Bitcoin ETF fell, directly impacting Bitcoin prices.
In contrast, Ethereum broke its weekly outflow streak with a record $30 million in inflows. This means the total entry fee is $307 million in just the first week after the launch of these Hong Kong ETFs.
Decade of low Bitcoin inflow rate between exchanges
In addition to losses on Bitcoin ETF inflows, exchange inflows fell to their lowest level in a decade. Similar to 2015, the Bitcoin exchange inflow value is now just 20 thousand BTC. Additionally, long-term holders have halted distribution to reaccumulate Bitcoin.
The crypto market could witness a complete downtrend as Bitcoin moves towards an accumulation zone. Some analysts have talked about the likelihood of Bitcoin surpassing the $50,000 mark before returning to its all-time high.
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