Bitcoin Observes Pullback To $58,000: Is This The Cause?
Bitcoin has recently experienced a pullback to the $58,000 level. On-chain data offers some insights into what might be behind this decline.
# Significant Tether Withdrawals from Exchanges
According to the market intelligence platform IntoTheBlock, centralized exchanges have witnessed over $1 billion in Tether (USDT) outflows recently.
Typically, investors leave their assets on exchanges when planning to trade soon, so withdrawing large amounts suggests a shift toward long-term holding. For a volatile asset like Bitcoin, exchange outflows usually indicate bullish sentiment, as holders move funds off exchanges, signaling reduced sell pressure.
However, in this case, the withdrawn asset is a stablecoin, which changes the implications. Investors often hold stablecoins like Tether to avoid market volatility. When they eventually re-enter the market to buy assets like Bitcoin, it typically boosts prices, making stablecoin inflows to exchanges a bullish signal.
On the other hand, when investors withdraw stablecoins to self-custody instead, it could indicate bearish sentiment. This behavior suggests they aren’t planning to swap back into volatile assets like Bitcoin anytime soon. The recent Tether withdrawals could be a sign that investors are cautious and may have even sold Bitcoin, opting for self-custody immediately after trades.
As highlighted by IntoTheBlock, previous large Tether outflows from exchanges have also correlated with bearish movements in Bitcoin’s price.
# Impact of Derivatives Market Volatility
Additionally, the cryptocurrency derivatives market has seen significant liquidations due to recent price volatility in Bitcoin and other coins.
The following table from CoinGlass summarizes the liquidation activity during this volatile phase:
# Bitcoin Liquidations
Over the past 24 hours, roughly $146 million in liquidations have taken place across the crypto market, with $120 million coming from long positions, accounting for over 80% of the total.
Interestingly, Ethereum (ETH) has seen slightly more liquidations than Bitcoin this time, which is uncommon, though the difference is just $6 million.
# Bitcoin Price Update
As of now, Bitcoin is trading around $58,800, down 4% in the last 24 hours.
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