TL;DR Breakdown
- Bitcoin price drops below $30,000.
- Less demand for Bitcoin is one reason for the price drop.
- On-chain indicator suggests that whales are accumulating Bitcoin.
For the first time since June, Bitcoin plunged once again below $30,000. The plunge means that Bitcoin over the past week has dropped by almost 10 percent.
Although the entire crypto market over the past week has remained indifferent, several factors have been attributed to Bitcoin’s plunge below $30,000.
One of them is the fact that there is less demand for Bitcoin now, unlike what the market experienced in April and May.
Another one of the many reasons is the Grayscale Bitcoin Trust that has started unlocking shares en masse into the market. Reportedly, the shares to be unlocked by Grayscale would roughly hit 31,900 GBTC shares this month, indicating further dip may occur eventually.
Good news after Bitcoin plunge
After Bitcoin’s plunge below $30,000, it remains normal for there to be panic in the market. The fear and grid index also affirmed that the market is starting to experience this as several retail holders are beginning to sell off their holdings.
However, in the wake of all the panic selling and market downturn, on-chain metrics suggest whales may be steadily accumulating BTC, a good development after the plunge.
According to Glassnode’s July 19 “The Week On-Chain” report, the Bitcoin reserves of centralized exchanges have continued to evaporate despite the recently sustained bearish momentum, with an average of 36,000 Bitcoin (worth roughly $1 billion) being withdrawn from exchanges monthly.
Glassnode infers the shrinking Bitcoin reserves on exchanges as indicating large investors moving BTC into secure storage rather than leaving their coins on exchanges in preparation for selling.
Another good development is the recent increase in the number of entities hodling Bitcoin since May, increasing from roughly 250,000 to nearly 300,000.
After Bitcoin drop, what happens to altcoins?
It is an unwritten rule in the crypto market that when Bitcoin faces hard times, altcoins follow suit.
The entire altcoin market has continued to bleed out. Ethereum, for example, traded above $1,950 just two days ago, but has dropped by more than $200 since then. Earlier today, ETH dipped to $1,720, which became its lowest price position since late June as well.
Other altcoins have continued to drop, too, after Bitcoin plunged below $30,000.
