According to recent data from Glassnode, an on-chain analytics firm, the exchange inflows of the two largest cryptocurrencies by market capitalization have surpassed that of stablecoins. Recent data suggests negative values which reflect a net sell-side regime since the beginning of April this year.
As highlighted in Glassnode’s graph below, exchange inflows are pointing to increased sell-side pressure with an absence of buy-side pressure outside of stablecoins. Glassnode suggests that the recent trend is a distinct break from the significant buy-side pressure seen in the first quarter of the year.
Notably, as the buy-side weakened in early April, it coincided with the start of the prevailing market correction. Simultaneously, another set of data highlights the volatility being experienced by the assets in face of the United States regulatory crackdown.
Glassnode says that following the recent events, the market has experienced significantly volatile moves in both directions. In particular, Bitcoin maintained its stability for a significant period even in times of chaotic scenarios like amidst the US debt default worries but the chances of volatility were always on-line.
However, currently, the magnitude of realized losses recorded on the chain remains quiet at $112 million, which is significantly lower from its peak. A realized loss is the loss that is recognized when assets are sold for a price lower than the original purchase price.
Notably, the current level remains $3.05 billion lower than the largest recorded capitulation event. Hence, the current standings are about 96.5% lower than the peak which was recorded at $3.16 billion around July last year. In a nutshell, it suggests an increased degree of resilience amongst market participants.
In the past two days, the United States Securities and Exchange has filed charges against two major crypto firms. On one hand, it has spilled volatility in the sector and on the other, it escalated exchange outflow levels.
Notably, the exchange experienced a net outflow of 10,500 Bitcoin, with only 11 trading days recording larger outflows. However, the current value remains a significant 29,800 Bitcoin (74%) lower than the peak net outflow of 40,300 Bitcoin.
While outflow levels signify a bullish sign, the recent move hints at bigger possibilities including waning trust of investors particularly in the US. As Todayq News reported the Bitcoin supply in the US has witnessed an 11% year-over-year dip since June 2022, indicating a decreasing faith in Bitcoin’s resilience among American traders. The mounting regulatory pressure in the U.S. has triggered traders to seek refuge in stablecoins, perceiving them as a safer alternative.
The threat of potential compliance-related penalties and clampdowns has incentivized a shift towards more conservative investments, even at the expense of potentially higher-yield opportunities. As of writing, Bitcoin is changing hands at $26,685.30, about 1.93% lower than that over a day whereas Ethereum is trading at $1,861.72, about 1.10% lower than that of past day.