After falling for the previous five weeks, the industry’s two major cryptocurrencies by market capitalization, Bitcoin and Ethereum, are now down nearly 50% from their all-time highs set during the 2021 price surge.
With a market value of $628 billion, the leading cryptocurrency Bitcoin continues to command 41.8 percent of the market. According to crypto data aggregator CoinMarketCap, it is currently trading at $32,947, a figure not seen since July 2021.
Since Bitcoin’s all-time high of $68,789 on November 10, 2021, its value has dropped by 51.98 percent as you can see in the image below.
It’s a similar situation with Ethereum, the second most popular coin after bitcoin. It had a market domination of around 19.2 percent, with a current value of $289 billion, however it is now worth $2,395, or approximately 50.8 percent of its previous high of $4,891.70, set on November 16, 2021.
Part of Bitcoin’s recent price fluctuation can be explained by its exchange inflows and outflows. Increased inflows often indicate an impending bear market as investors sell their holdings on exchanges for cash or fiat-pegged stablecoins.
Greater withdrawals, on the other hand, might be a positive indicator since investors may be shifting their assets to cold storage wallets for long-term holding.
According to Glassnode statistics, Bitcoin’s 15% drop in the previous seven days aligns with net transfer volumes to other exchanges. On May 6, there was a net influx of around 12,246 Bitcoin, which equates to nearly $402 million at today’s pricing.
Interestingly, Ethereum’s total net numbers this month revealed that the majority of investors were withdrawing their holdings from exchanges. The mismatch between Ethereum’s recent negative price action and massive outflows from exchanges shows that the number two cryptocurrency may be subject to other causes.
If it is not decentralised markets, the Ethereum that is exiting exchanges might be utilised in lending or borrowing protocols, minting stablecoins, or a variety of other DeFi operations that do not result in the asset being sold. Bitcoin, on the other hand, does not have the same amount of DeFi activity.
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Abhishek is a Digital marketing graduate with extensive experience in writing for finance, lifestyle, and tech. He has worked with numerous marketing and advertising agencies throughout his professional career. His interest in the world of Gaming and technology motivates him to stay informed about every little detail and write with passion.