Bitcoin price plunged below $39,000, traders are setting their funds aside amid rising risk-off tendencies
According to Santiment and some reports, after a rough week, the Bitcoin price has dropped below $39,000. This shows that traders actively leave the industry or set their funds aside amid rising risk-off tendencies. At the time of writing, BTC is changing hands at $40,978.
BTC/USD 4-hour chart | Source: TradingView
After Bitcoin price dropped to $38,200, trading volume spiked massively
Compared to Bitcoin’s recent bearish trading sessions, trading volume on the recovery day has increased significantly, especially compared to weekend sessions, which usually entail shallow trading volumes.
“On a nice rebound day for crypto, trading volume has picked up significantly after a particularly dormant weekend as prices quickly jumped back to their pre-Thursday dip prices. Congrats to those who were bold enough to buy the dip this past weekend”, Santiment reported.
Bitcoin, Terra (LUNA), and other cryptocurrencies have reached or rallied above Thursday’s price drop. In the long term, Bitcoin remains in a downtrend, which shows no change in global sentiment among traders and investors.
After the trend worsened in the crypto market, various analysts expressed their concerns about Bitcoin’s stability as it was so close to breaking a solid support line formed in February.
The movement of technology stocks and other risky assets also opposes the first cryptocurrency. As Blockware analyst Will Clemente has noticed, Bitcoin remains strongly correlated with most tech holdings, which suggests that the asset will most likely closely follow its market performance.
When the Fed announced the rate hike, financial and crypto traders started moving their funds away from risky assets into fiat currencies or safe investment options like bonds.
With the increase in risk-aversion in the market, digital assets could lose some of their capitalizations, especially with the tightening of monetary policy in the US.
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