The Flash Crash of Bitcoin: What Really Happened?
Bitcoin (BTC) had its biggest drop this week since months ago, leaving investors with confusion and fears. This sudden fall is most likely caused by US data and institutional investor moves that happened recently. Now, let’s take a deep dive into these events to know why the bitcoin market dropped again.
Institutional Investors’ Actions
USDT Purchases Stop
According to recent on-chain data, institutional investors are no longer buying USDT from the Tether Treasury and depositing it on exchanges. The suspension was reported two days ago by Lookonchain, an on-chain analytics platform. Analysts believe that institutions that were buying at dips have stopped buying amid weak price performance hence causing the current drop in value for bitcoin.
Large Deposits and Withdrawals
- Cumberland, one of the largest crypto market makers, deposited 95 million USDT last week across centralized exchanges including Coinbase, Kraken, and OKX among others.
- Other big firms have taken out huge sums of money from Tether, thus affecting the market more.
More Transfers to Exchanges
Galaxy Digital Moves
Apart from decreased institutional purchases, we have seen increased transfers going to exchanges. In a recent move, $16.14 million worth of Bitcoin was deposited by Galaxy Digital – a major player in cryptocurrency markets – onto Binance and OKX. According to on-chain analyst The Data Nerd, Galaxy Digital moved 276 BTC ($16.14 million) onto these exchanges but still has 3,574 BTC ($210.34 million) sitting in its wallet.
The Bigger Picture
All this combined creates a perfect storm, resulting in the present dip in Bitcoin’s value due to halted USDT purchases coupled with more transfers towards exchanges where they can be sold off easily. Though these movements may be worrying, they are typical for any market like crypto that goes through ups & downs influenced by different macroeconomic matters as well as investor sentiments.
Conclusion
The recent fall of Bitcoin can be attributed to institutional investors’ paused USDT purchases and more transfers going to exchanges.
Therefore, it is important for investors to keep themselves updated about the market changes since it is still volatile. Watch out for what institutions do because they have a major impact on where the market will move next.
Stay ahead of the game – track institutional moves and make educated investment decisions within the ever-changing world of cryptocurrency!