Bitcoin (BTC) experienced a turbulent week, ending April 23 with a 9% drop to $27,600. This marks the largest single-week percentage loss for the leading cryptocurrency since early November. The primary factors contributing to the decline of BTC were rising bond yields and decrea...
Bitcoin (BTC) experienced a turbulent week, ending April 23 with a 9% drop to $27,600. This marks the largest single-week percentage loss for the leading cryptocurrency since early November.
The primary factors contributing to the decline of BTC were rising bond yields and decreasing U.S. dollar liquidity.
The 10-year US Treasury note yield climbed six basis points (bps) to 3.58%, registering its second consecutive weekly increase. This surge diminished the appeal of risk assets, including cryptocurrencies.
Concurrently, the USD Liquidity Conditions Index, which monitors the supply of the greenback in the monetary system, fell to $6.13 trillion – its lowest point in over a month.
Moreover, traders are pricing in a higher likelihood of the Federal Reserve continuing its tightening cycle with a 25 basis point rate hike in May.
Panic selling among Bitcoin traders
The past week’s BTC price movements left many inexperienced traders feeling spooked, and on-chain analytics data from Glassnode confirms this sentiment. The firm reported a sharp increase in younger coins being sent to exchanges at a loss last week.
Glassnode typically classifies the BTC supply by age, labeling wallets holding coins for 155 days or more as “long-term holders” (LTHs). Those holding coins for shorter periods are designated as “short-term holders” (STHs), who often represent the more speculative segment of the Bitcoin investor base.
Since approximately April 16, the data reveals that STH coins – moving within the past 155 days– have been transferring to exchanges at lower prices than their previous transaction price.
This scenario is a clear indication of increasing panic among STHs due to the recent Bitcoin selling pressure.
The panic among cryptocurrencies holders extends to long-term holders (LTHs) as well, with LTH realized losses also increasing among those moving funds to exchanges.
Coinglass data indicates that weekly inflows to one of the largest exchange, Binance, reached 21,000 BTC.
Curious trading behavior
Research firm Santiment observed an unusual amount of loss-making volume compared to volume in profit for both Bitcoin and Ethereum(ETH), despite their relatively mild price retracements.
The firm noted that “with many traders FOMO’ing in Bitcoin above $30k and Ethereum above $2k this past week, loss transactions have mounted as markets pulled back.”
Santiment added, “Since Thursday, traders are moving coins below prices they obtained them at three times as often as above.”