The decline in overall transaction volume to $63.63 billion is a slowing trend. crypto- points to the market. TV (Total Value Locked) dropped 17% in just one day, dropping the overall crypto market value to $2.3 trillion. Additionally, the fear and greed index reflects the retreat of the bulls.
As a result of the decline in the market, Bitcoin and many leading cryptocurrencies such as Ethereum are losing value. Bitcoin is trading at $62,309.95, down 2%, and Ethereum is trading at $2,999.41, down 2.2%. Currently, it appears that the downward trend will continue and will affect other cryptocurrencies as well.
Reasons Behind Today’s Crypto Market Drop
The market remained sideways for weeks. Additionally, it has experienced only a short-term rise in the last few days. However, today’s decline was initiated by new regulatory issues in the crypto market. This situation negatively affected investors’ sentiments and caused a decline. Declines in the Bitcoin Futures ETF and exchange inflows also deepened this bearish situation.
SEC Intervenes in the Crypto Market
Robinhood has become the SEC’s next target as Wells received notice from US regulators. Robinhood recently disclosed this information in a filing on Monday, saying,
On May 4, 2024, RHC received notice from the SEC Staff (“Staff”) that the Staff recommended to RHC that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934. We received a “Notice from Wells” informing us that it had made a “preliminary decision” to proceed.
As a result of this, the exchange decided to discontinue cryptocurrencies from being called or referred to as securities by the SEC. This isn’t the first time Robinhood has removed support for cryptocurrencies. Previously, when the SEC took interest in Binance and Coinbase by naming Cardano, Solana, and Polygon as securities, Robinhood immediately removed these three cryptos.
Consecutive Bitcoin Outflows
Last week, outflows increased in the crypto market, marking the fourth straight week when assets under management (AUM) decreased by $251 million. These outflows continued despite the launch of Hong Kong Bitcoin and Ethereum ETFs. These outflows were especially evident in the case of Bitcoin, as $284 million was withdrawn from Bitcoin funds.
On the other hand Ethereum, ended its one-week debut streak with a record $30 million debut. Thus, in just the first week of the launch of Hong Kong ETFs, the total inflow amounted to US$ 307 million.
Additionally, the Bitcoin exchange inflow rate has also fallen to its lowest level in a decade. Similar to 2015, Bitcoin only generated 20 thousand BTC inflows to exchanges. It is also noteworthy that long-term holders have stopped reaccumulating Bitcoin. happened.
The number of people wanting to sell BTC has been decreasing since February 2018. The MA-365D Exchange Inflow has dropped from 90K to 36K.
The current trend for Bitcoin Exchange Inflow is 20K BTC, a similar situation occurred in 2015.#deficit pic.twitter.com/YGNUOPBWqj
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) May 6, 2024
The crypto market may witness a full-blown downtrend as Bitcoin moves towards an accumulation zone. Several analysts have talked about the possibility of Bitcoin falling to $50,000 before returning to its all-time high.
