The Crypto Market May Face an Intense Wave of Institutional Selling Shortly

June 11, 2022

The crypto market is facing struggles for the last seven months. In May, the total market cap of the digital currency fell by 28%. The World’s original and the largest cryptocurrency BTC alone has lost 37% of its value and is currently trading at $30,180. Accounting for all the losses Bitcoin is 56% down from its all-time high of $68,790.

The world’s second-biggest cryptocurrency Ethereum is facing, even more, worse situations than what Bitcoin is going through. ETH in comparison with BTC fell by 52% over 2022 with a loss of 63% hitting its record high of $4,892 on November 16, 2022. whereas the other cryptocurrency also has experienced similar or even worst losses over the year. 

Strategists’ view on Crypto downtrend

Kara Murphy, CIO of Kestra Holdings’ opinion on the crypto downtrend explains: 

“It feels very much to me like crypto is also subject to a lot of the monetary cycle that’s been hitting the more traditional asset classes. Looking at the rapid increase in crypto prices, it seems clear that they really benefited from easy-money policies, and now that the money is coming out of the system, that’s a good part of the reason why crypto is declining more recently.” 

Meanwhile, the digital asset broker Bequant says that only 51% of BTC addresses are in the green today as they have bought their BTC at a higher price than their selling price today. Whereas the chief executive officer of Securitize Capital, Wilfred Daye said, 

“There may be capitulation because larger institutional players, guys who got in during the current cycle, they’re at risk of selling their assets and liquidating their assets. This particular cycle that started late 202, you had a lot of institutional folks getting in at a higher price, so I think it’s more institutional capitulation.” 

BTC miners are currently dealing with rising prices and falling price pressure transferred $6.3 billion in Bitcoin to exchanges in May. 

In the fast-moving volatile crypto world of digital assets, the factors affecting may turn the sentiment around at any moment.

Adding to this kara says that investors who bought Bitcoin at the price of $10,200 on or before November 2020 are now on the profitable side of the market. Whereas it is not the same for the one who bought BTC in January 2021 or beyond, he says.   

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