Investing.com — Bitcoin fell on Wednesday, extending a sharp decline from the previous session after a large volume of tokens moved into a popular exchange rattled sentiment with the prospect of a major sell-off event.
The world’s largest cryptocurrency fell sharply on Tuesday, abruptly reversing recent gains and falling back below the key $60,000 level. Cryptocurrency prices in general also fell in tandem with Bitcoin.
fell 5.8% to $59,481.00 at 01:40 ET (05:40 GMT).
Transfer of $1.88 billion in bitcoins scares markets
Whale Alert, an X-profile that tracks large cryptocurrency transactions using on-chain data, said around 30,000 Bitcoin tokens, worth $1.88 billion at current exchange rates, were transferred from a cold wallet to cryptocurrency exchange Binance on Tuesday.
Later reports indicated that the transaction was an internal transfer between Binance wallets. But the transfer still made traders uneasy with the prospect of a sell-off event, given that it showed a large amount of Bitcoin being moved to an exchange.
Token moves on exchanges typically herald a sell-off, though it was unclear whether such a scenario would occur.
But news of the transfer increased selling pressure on Bitcoin, which was already retreating after the weekend rally petered out.
Capital inflows into Bitcoin are slowing, according to Glassnode
A report from blockchain research firm Glassnode showed that net capital inflows into Bitcoin had “cooled noticeably” in recent months, likely driving the token’s performance to between $50,000 and $60,000.
The report suggested that investor optimism over the launch of spot Bitcoin ETFs had completely cooled and that a degree of equilibrium had been reached between investors holding profitable and losing positions in the token.
But the report also noted that speculative activity around Bitcoin had fallen sharply in recent months, leaving spot market action as the key driver of prices in the near term.
Glassnode warned that periods of speculation and quieter market action preceded an “expectation for heightened volatility,” which could herald wilder swings in Bitcoin’s price in the coming weeks.
Bitcoin has remained within a narrow trading range after hitting an all-time high in March as trading volumes for the token steadily fell amid waning retail interest.
Cryptocurrency prices today: altcoins fall at the same rate as Bitcoin
Broader cryptocurrency prices followed Bitcoin's declines amid a dearth of positive signs for the sector.
The world's No. 2 cryptocurrency fell 8.6% to $2,464.30, while Bitcoin Cash dropped between 4% and 5%.
lost 10.4%, while among meme tokens, it lost 6.7%.
