Chinese crypto journalist Colin Wu reported this week using data provided by South Korean cryptocurrency on-chain data provider CryptoQuant. Bitcoin (BTC) shared a report explaining the reason for the collapses in the price.
“Short-Term Investors Move Their Bitcoins To Cryptocurrency Exchanges”
According to the CryptoQuant chart shared by Wu, on May 5 and May 6, short-term investors moved 11,760 Bitcoins to various cryptocurrency exchanges. According to the journalist, these cryptocurrencies had been kept in their wallets by the investors in question for less than three months.
According to CryptoQuant data, the decline in the past two days may be dominated by short-term holders. On the 5th and 6th, a total of 11.76k “young” BTC held for less than 3 months flowed into the exchange. pic.twitter.com/aUCE9hiAtk
— Wu Blockchain (@WuBlockchain) May 7, 2022
However, one of the factors that is thought to be effective in the fall of the BTC price is the FED’s 50 basis points increase in interest rates. The said step went down in history as the largest rate hike in the last 22 years. After this development, Bitcoin was stable for the first time and even experienced a small rally, but then, with a sudden 8% crash, it also brought the entire cryptocurrency market down.
As it is known, there is currently an unusually high inflation in the USA. The war between Russia and Ukraine is thought to be one of the main causes of this inflation, driving up energy prices. The FED, which wanted to prevent inflation, found the solution by increasing interest rates.
The world’s largest cryptocurrency, stock market and major indices such as the Nasdaq 100 and S&P 500 have gone downhill.
At the time of this writing, the BTC price is trading at $35,791 with a 0.53% drop in the last 24 hours. Bitcoin was hovering around $39,500 on May 5.
*Not investment advice.