The global cryptocurrency market cap has lost $40 billion over the past 24 hours amid ongoing market-wide turmoil that has seen several assets such as Bitcoin (BTC) and Ethereum (ETH) fall by shocking margins.
This downtrend, which began on January 12 following the initial hype surrounding the immediate approval of the Bitcoin ETF, has continued amid several sell-offs from institutional and retail investors alike. This led to a series of sell-offs that exacerbated panic throughout the market.
Bitcoin is leading to a market-wide bloodbath
As a result, market sentiment has declined significantly, according to data from Santiment. Santiment's overall social volume metric indicates that despite the increase in social activity over the past week, the cryptocurrency community has primarily focused on buy and sell signals.
However, despite the bearish trend, market participants are leaning towards “buy on the dip” trends, with “buy” signals rising to 2,431, accounting for 3.61% of the total social volume. In addition, the number of mentions of “for sale” increased to 1,230, representing 1.83% of the social volume.
The market faced a major setback yesterday after Bitcoin collapsed below the pivotal support threshold of $40,000. The asset defended the $40,000 level year-to-date until January 22, when it fell to $39,700.
Bitcoin regained the $40,000 support almost immediately. However, renewed downward pressure has led to a similar decline in the market, with the asset currently trading at $39,734. Bitcoin is down 3.7% in the past 24 hours.
Bitcoin's decline affected the rest of the market, with Ethereum falling 4.11% over the past 24 hours to $2,307 at reporting time. ETH posted a massive 5.11% intraday loss yesterday, as bears targeted the $2,300 support level in an attempt to spur further declines.
GBTC sell-offs
The market bloodbath was exacerbated by the massive sell-off from Grayscale Bitcoin Trust (GBTC) shortly after the ETF approval. Interestingly, following the SEC's approval of the ETF, Alameda, FTX's sister company, recently withdrew its case against Grayscale.
However, data indicates that FTX also sold 22 million shares of GBTC stock, exacerbating downward pressure on Bitcoin and the broader market. Along with the FTX sell-off, institutional investors continued to dump their GBTC shares, leading to more BTC selling.
Grayscale recently moved $1.3 billion to Coinbase, the custodial service provider for GBTC. Amid a $2 billion ETF outflow, one market analyst noted that the product's high 1.5% fees and lack of a massive discount have led to an investor exodus.
Meanwhile, as the attack continues, CryptoQuant data confirms that exchange net inflows have recently turned to a bullish footing, with deposits on exchanges currently below the weekly average. This pattern entails that the sales campaign may slow down.
