The demand for Bitcoin fades, and several bearish factors struggle to pull its price back above the level of $31,000. For the past two months, BTC has been having a hard time rising. The midday selling last Monday pushed the price to a low of $30,400. Fortunately, the bulls provided support and lifted the price back to $30,850.
As a whole, the cryptocurrency market continues to face hardships as miner flees from China due to crackdowns on the mining industry. This led to the fourth consecutive negative adjustment in the difficulty of Bitcoin mining which crashed by almost half since mid-May this year.
Meanwhile, insights into the current state of the Bitcoin network were provided at the UTXO Realized Price Distribution. It is a metric that measures on-chain volume profiles beyond different price groupings.
Currently, it shows that 10.5% of Bitcoin’s supply flow runs near the $31,000 and $34,300 range, which is its peak since the $11,000 price level.
An analyst said that this indicates a healthy level of volume at the present level. However, if the BTC price falls, the next support levels will be $26,500, $23,300, and $18,800.
In May, the market-wide pullback led to a significant loss of interest from institutional investors who appeared to be in risk management mode as the BTC price struggled to rise.
Another expert said that the evidence of the decrease of interest could be detected at the market price of GBTC, which is trading at -11.0% to -15.3% discount.
Another way is to observe the net inflows to the Purpose ETF, which significantly slowed down. According to the latest data, the ETF reflected a net outflow of -90.76 BTC, which is its biggest outflow since mid-May.
Moreover, crypto investors worry that the surge in covid delta variant cases led to a pullback in the global financial market.
Meanwhile, even though the institutional activity was muted, Bitcoin’s on-chain deposits to exchanges continued with over 28,700 BTC. It is the largest inflow for over a month and a half, which took place last July 16.
According to an analyst, the common interpretation of these inflows during times of consolidation and corrections is negative developments. He explained that the reason for this is that they can result in increased selling which might lead to a short-term price breakdown. He added that the net inflow of 1,780 BTC to over-the-counter trading desks for the past two weeks was moving against trends of outflows in place since November last year.
Furthermore, the overall cryptocurrency market cap stood at $1.245 trillion, and the dominance rate of Bitcoin is 46.3%.