CryptoQuant, an on-chain analytics platform, has pinpointed three key factors contributing to the current market downturn, with Bitcoin miner capitulation being one of them. The cryptocurrency market is currently grappling with significant sell-offs that are wiping out gains from the recent bullish wave. This downward trend has persisted for weeks, with Solana and Cardano experiencing losses of over 13% in their weekly performance.
The meme coin market has fared even worse, with Shiba Inu plummeting over 20% in just seven days. This sharp decline has caused distress among market participants, leading to a decrease in positive sentiment toward large-cap cryptocurrencies to its lowest point this year.
As bearish pressure continues unabated, market participants are left wondering about the reasons behind this trend. According to IT Tech, a CryptoQuant analyst, three crucial elements are contributing to the recent market dip based on on-chain data analysis.
One of the factors highlighted in the report is the influence of Bitcoin on the overall collapse of the market, despite BTC itself experiencing a less severe price drop. A significant contributing factor is the increased selling of BTC by miners who are struggling with decreased revenue, exacerbated by the latest halving cycle which has halved their profits.
In addition, CryptoQuant noted a decrease in the issuance of stablecoins such as USDT and USDC, indicating a lack of new money entering the market. This, coupled with observed outflows from Bitcoin spot ETFs, further contributes to the market downturn.
The report suggests that with fear and sell-offs among short-term investors, it is crucial to monitor the support level at $62,400 closely, as it represents the average realized price for short-term holders and could help stabilize prices in the near term. At the time of writing, Bitcoin is trading around $64,925, marking a 3% drop since last week.
Please note that this content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article are solely those of the author and do not represent the views of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions, as The Crypto Basic is not liable for any financial losses incurred.