Bitcoin Traders Warn Of Potential Price Tank

Bitcoin (BTC) has taken a significant hit lately, with the cryptocurrency experiencing a 12% drop from its 90-day high of $25,134 to its current price of $21,989 as of March 8. This bearish price action has left many traders wondering what could be causing the downturn.

 

Red Flag for Investors

One important indicator that could provide some insight is the Exchange Flow Balance metric, which tracks the net amount of bitcoin deposited or withdrawn from exchanges. Recent activity suggests that bitcoin whales – investors holding large amounts of the cryptocurrency – are moving their holdings off exchanges, indicating a cautious approach to the market.

On Mar. 7 and Mar. 8, a total of 11,896 BTC were withdrawn from exchanges, worth approximately $261.86 million at current prices. Historically, large withdrawals of this kind suggest that investors are anticipating a market downturn and taking measures to safeguard their investments.

 

Will Stablecoin Influx push Bitcoin down?

Another factor that could be impacting the BTC price is the influx of stablecoins into centralized exchanges, which has totaled billions of dollars. Investors often use stablecoins to avoid the volatility associated with cryptocurrencies like Bitcoin, so the recent drop in BTC’s price may have prompted some to convert their BTC back into stablecoins. If this is the case, then the selling pressure created by the influx of stablecoins into centralized exchanges could have a bearish effect on Bitcoin’s price and other cryptocurrencies that investors may be swapping into.

However, it is important to note that other factors could impact the price of cryptocurrencies, and predicting market movements with certainty is always difficult. As BTC and other cryptocurrencies continue to navigate this uncertain terrain, traders will be keeping a close eye on indicators like the Exchange Flow Balance and the stablecoin influx to try and anticipate where the market is headed next.