Here are three main reasons why Bitcoin and the cryptocurrency market are down today

On-chain analytics platform CryptoQuant has identified three crucial factors contributing to the ongoing market collapse, including the capitulation of the Bitcoin miner.

The cryptocurrency market is struggling serious sell-offs, erasing the gains of the last bullish wave. This decline has persisted for weeks, with Solana and Cardano each losing more than 13% in their weekly performance.

The meme coin market fared even worse, with Shiba Inu plunging more than 20% in seven days. This sharp decline has caused significant distress among market participants, bringing positive sentiment towards large-cap cryptocurrencies to its lowest level this year.

As the bearish pressure shows no signs of abating, market participants reflect on the factors behind this trend. IT Tech, an analyst at CryptoQuant, recently identified three key elements that are contributing to the recent market decline based on on-chain data.

Bitcoin miners dump their holdings to cover costs

First, the relationship points out that the collapse of the entire market was influenced by developments regarding Bitcoin, although BTC itself suffered a less severe price drop.

One of the biggest contributing factors is the fact that Bitcoin miners are downloading more BTC than usual. This sell-off is the result of miners struggling with lower revenue, exacerbated by the latest halving cycle, which further halved profits.

With Bitcoin miners’ revenue is declining by 55%, they were forced to sell a larger portion of the BTC they earned to cover operating costs. For example, in an update, analyst Ali Martinez pointed out that miners downloaded 1,200 BTC, worth around $80 million, in a single day.

Meanwhile, experts argue that the current capitulation of miners is nearing an end, projecting a more gradual uptrend for BTC in the near term.

Stablecoin issuing stalls

Additionally, CryptoQuant observed a decrease in USDT issuance and USDC stablecoins, identifying this as another factor contributing to the recession. The report claims that the lack of stablecoin issuance indicates the absence of new money entering the market.

Notably, tracking platform Whale Alert called attention to a significant transfer of USDT from Tether’s treasury four weeks ago.

Outflows from Bitcoin ETFs extend

The final factor influencing the market decline is the outflows observed from spot Bitcoin ETFs. For example, at the end of yesterday’s trading, the United States Bitcoin spot ETF market recorded outflows of approximately $146 million, marking the third consecutive trading day of negative flows.

While the negative was influenced by Fidelity and Ark Invest, other issuers such as BlackRock, WisdomTree and Valkyrie recorded zero intraday inflows on Monday.

Bitcoin could collapse to $62,000

The report concluded that, with current conditions causing fear and triggering sell-offs among short-term investors, the support level at $62,400 should be monitored closely.

This level represents the average realized price for short-term holders and is expected to help stabilize prices in the short term. As of this writing, Bitcoin is hovering around $64,925, down 3% from last week.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.

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