The largest cryptocurrency has fallen to $38,340. The short-term recovery pushed BTC above $40,700. Increased volatility leads to serious losses, especially for short-term investors. So why did the last drop happen and will the markets start to recover?
BTC comments at the last minute
In the past, we have seen days when Bitcoin was much more unstable. The daily price fluctuation of 4% was not a noticeable movement compared to that period. For this reason, it is normal for new investors to be nervous or worried when the price fluctuates by 4%.
Glassnode data showed that the net flow of bitcoin last week was $1 billion. This clearly shows that buyers are still buying at the lowest price. In the long run, this is good news for the bulls as it signals demand, but for now Bitcoin needs to protect the $40,000 zone by bringing it back. Another important factor to note is the increase in the number of whale transactions, with a noticeable increase in transactions ranging from $100,000 to $1 million.
When will Bitcoin grow?
Very loud buying activity may increase, but mining activity is also growing, as indicators show that the average bitcoin hashrate is reaching record highs day by day. As the Federal Reserve and wartime uncertainty put pressure on the crypto industry, this is an important sign of bitcoin adoption through mining.
A worrying sign, however, is that the weighted sentiment data from Santiment for about April 21 shows that investors have fallen from the excessive highs seen before the crash in December 2021. This is not good news for those who want bitcoin to start a new rally. In fact, if the trend continues, traders should keep an eye on further price declines.
On the other hand, the resurgence of 24-hour active addresses indicates that coin trading activity is definitely growing.
Cryptocurrency news agencies excitedly reported that the Central African Republic has accepted bitcoin as a legal tender. But, according to Bloomberg, adoption is out of the question. It is reported that the government is working on a legal framework for regulating cryptocurrencies.