The two largest cryptos, Ethereum and Bitcoin, are down over 50% from their all-time highs and exchange flows are showing mixed pictures despite the bearish price action in the market, so today we’re taking a closer look at our latest crypto news.

After spending the past five weeks in decline, the industry’s two largest cryptos by market cap, Bitcoin and Ethereum, are down 50% from their ATH published in 2021 during the bull run. Dominating 41.8% of the market with a capitalization of $628 billion, Bitcoin is trading at $32,947, a level not seen since 2021, according to data aggregator CoinMarketcap. The number has seen a 51.9% drop in value since BTC was fixed at an ATH of $68,789 in 2021, and it’s a similar story with Ethereum as well.

eth net flow
Net flows on exchanges for Bitcoin from December 22, 2021 to present. Source Glassnode.

Ethereum has a 19.2% market dominance with a current market cap of $289 billion, but it is trading at $2,395, or about 50.9% from the previous high of $4,891 recorded in November 2021 . Aside from BTC, recent price action can be traced given the inflows and outflows in exchanges and larger inflows often signaling an impending bear market as investors moved their holdings around exchanges to sell for fiat or fiat-pegged stablecoins .

The larger outflows may be a bullish signal as investors could move their holdings to cold storage wallets for long-term holding. According to data from Glassnode, Bitcoin’s 15% drop over the past week also correlated with net transfer volume to various exchanges, and as of May 6, there was a net inflow of 12,246 BTC, or $402 million at today’s prices. Ethereum’s net transfer volume for the month suggested that most investors were moving their holdings off exchanges, and the contradiction between the recent bearish price action accompanied by larger outflows from exchanges only suggests that for the second largest cryptocurrency others forces could be at play.

BTC net flow
Net flows on exchanges for Bitcoin from December 22, 2021 to present. Source Glassnode.

Ethereum holders could withdraw their idle coins from exchanges for staking purposes, leading to the network merger expected in Q3. Investors can deposit their holdings on various decentralized exchanges in the world of DEFI, but when comparing the transaction volume for ETH on Coinbase and DEFI’s largest decentralized exchange, Uniswap, the latter reported a trading volume of $1.63 billion in the last 24 hours, while the former reported just over $500 million.

When not in the DEFI sector, the ETH exiting exchanges could be used in lending or lending protocols used to mint stablecoins or conduct other DEFI activities that do not result in the sale of the asset.

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