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Bitcoin realises losses of $3.2 billion but price recovers above investors buy-and-hold floor
Summary
Cryptocurrency prices recovered but remain well below recent all-time highs, with the bitcoin price recovering to the average cost of bitcoin held by investors who entered in the last 12 months, which typically provides a price floor and is currently $37.8k.
Despite the price recovery, significant losses were made last week, of at least $3.2 billion for bitcoin sent on-chain at a loss. This is the largest one-week USD loss but percentage losses were below those of the late 2017 and mid-March 2020 price falls.
The announcement of tighter regulation on cryptocurrency mining and trading in China raised questions in the industry about the importance of miners in the market. Chainalysis data, providing the most complete view of on-chain activity, suggests they provide relatively little liquidity, at just 1% of exchange inflows in May 2021 so far. While miners sent more to exchanges at the end of last week so did others, suggesting miners did not drive further price declines.
You can sign up for the Market Intel Newsletter, published weekly, https://markets.chainalysis.com/ (here).
Music by https://www.tylerbeckwithmusic.com/ (Tyler Beckwith)
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By ChainalysisSummary
Cryptocurrency prices recovered but remain well below recent all-time highs, with the bitcoin price recovering to the average cost of bitcoin held by investors who entered in the last 12 months, which typically provides a price floor and is currently $37.8k.
Despite the price recovery, significant losses were made last week, of at least $3.2 billion for bitcoin sent on-chain at a loss. This is the largest one-week USD loss but percentage losses were below those of the late 2017 and mid-March 2020 price falls.
The announcement of tighter regulation on cryptocurrency mining and trading in China raised questions in the industry about the importance of miners in the market. Chainalysis data, providing the most complete view of on-chain activity, suggests they provide relatively little liquidity, at just 1% of exchange inflows in May 2021 so far. While miners sent more to exchanges at the end of last week so did others, suggesting miners did not drive further price declines.
You can sign up for the Market Intel Newsletter, published weekly, https://markets.chainalysis.com/ (here).
Music by https://www.tylerbeckwithmusic.com/ (Tyler Beckwith)