Three factors behind the cryptocurrency markets decline on Tuesday
According to an expert referenced by CryptoQuant, the recent drop in the overall cryptocurrency market may signal a bottoming out.
In the past week, the total value of the cryptocurrency market has fallen by more than 7%, with a 3% decrease in the last month. Bitcoin (BTC) dipped below $65,000, while altcoins experienced significant corrections.
Altcoins, known for their volatility, have fared even worse than Bitcoin, losing over 4% of their market value in the last 30 days. Meanwhile, BTC has remained relatively stable, showing a 3% decrease during the same period.
The decline in the market cap to $2.4 trillion was attributed to miner capitulation, as highlighted in a CryptoQuant report. Following the halving of Bitcoin, block rewards were halved, leading to a 55% decrease in miner revenues. As a result, miners have been selling more Bitcoin to cover their expenses, adding to the selling pressure on the token’s price.
Stablecoins like Tether’s USDT and Circle’s USDC provide a stable entry point into the cryptocurrency market by pegging their value to the U.S. dollar. However, the issuance of stablecoins has been low recently, indicating a slowdown in new capital entering the market.
Bitcoin ETFs from major firms such as BlackRock and Fidelity saw record inflows in assets within a short period. However, recent outflows from these funds have added pressure to Bitcoin prices and the broader digital asset market. Over $600 million exited digital asset investment products last week after a Federal Reserve policy meeting.
Despite the current market conditions, analysts believe that a turnaround could be on the horizon in the short term. Historical trends suggest that prolonged low miner revenues coupled with a high hash rate could signal a potential market bottom, according to a report.
