“It could also be miners deciding to monetize their rewards,” Lifchitz added. Indeed, bitcoin holders, which could include larger holders such as miners, are pushing more inflows into exchanges to its highest levels since late July.
“In my opinion, this is a classic case of an overstretched market, which had advanced too much too quickly, and so was in dire need of consolidation,” said Jean-Marc Bonnefous, managing partner of multi-asset manager Tellurian Capital. “Crypto is dropping in sympathy with other traditional risk assets,” he added.
Equities indexes were in the red Friday:
Alessandro Andreotti, an Italy-based crypto over-the-counter trader, is optimistic despite the currency cryptocurrency market environment. “Bitcoin has been extremely oversold. It actually reminds me of the March crash,” he said. “But, honestly, I think it can bounce back after this drop.”
Yields in DeFi may become important to crypto traders should the market continue to show bearish signals: Ether locked in DeFi is up, from 5 million to 6.9 million in the past week, a 35% increase.
Investors also continue to lock bitcoin into decentralized finance. There are now over 74,000 BTC in use on Ethereum as those who lock in bitcoin gain a yield or profit in the DeFi ecosystem. In the past week, the amount of bitcoin in DeFi has increased 33%.
“An amazing amount of BTC is locked into DeFi, earning hodlers ‘dividends’ for simply owning the asset,” noted Henrik Kugelberg, a Swedish crypto over-the-counter trader.
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