Major exchanges across the world have seen a considerable drop in bitcoin (BTC) deposits since March and have now reached the levels last witnessed in November 2018, according to analysts at Luno and Arcane Research.
Nigeria is one of the biggest cryptocurrency markets for Luno which was recently acquired by Digital Currency Group (DCG) after it announced its services now reach 5 million users.
Currently, 2.57 million bitcoin are deposited at crypto exchanges, which equals an outflow of 374,777 BTC since 15 March. In the same period, more than 100,000 BTC have found their way into Ethereum protocols, which could explain some of the outflows.
Bitcoin investors are very agitated by the slow movement in the market. The uncertainty in the stock market has led to a new sell-off for most cryptocurrencies this week, and the fear is back in the market. After it dropped to about $10,000 the price has struggled to climb back to $12,000 it breached in August.
The weekly analysis of the market by Luno and Arcane Research found that the Fear and Greed Index pushed slightly into the “Greed” area last week, but the sentiment turned drastically with yesterday’s price action. The market is once again fearful after the Index dropped down to 39 on Thursday, September 2020.
“While the uncertainty is looming again, we got to remember that we spent most of June and July in this sentiment area as well, before heading higher again,” the analysts said.
Experts also say September is usually a bearish month. The cryptocurrency is down 9 percent so far this month despite doing better than the indices. In the past three years, bitcoin has declined 9 percent, 6 percent, and 14 percent respectively and the trend appears to be continuing in 2020.
Bitcoin’s 7-day average daily volume has not moved much since last week and is currently stabilising slightly above $1 billion.
“We saw a small spike in volume with yesterday’s price drop, which marks another volume spike on decreasing price. Strong volume support when bitcoin sells off is never a good sign, and as pointing out earlier, a reversal in price to the upside should see the same volume support to give confidence back to the market,” the analysts said.
Overall, the cryptocurrency market is seeing a tough week. After recording the biggest gains in August, Ethereum is currently struggled the most out of the top three coins, crashing down over 8 percent the past week. It has slightly recovered on Friday gaining over 2 percent to reach $354 from $346 it closed on Thursday.
