Chainalysis, one of the foremost crypto and blockchain data analytics firms, has provided some comforting news to jittery cryptocurrency investors at this time. In a new analysis report, the firm provided insights into the Bitcoin market for March 2020, in which it provided good news about the price of the top digital asset.
Massive Selloff and Exchange Volumes
As the report explains, cryptocurrency exchanges have received almost 319,000 units of the asset on March 13 alone, marking a significant inflow of assets for the month in general. However, as the entire market experienced, the market for Bitcoin plummeted significantly between March 12 and 13, causing the asset’s price to drop to about $3,800 for a while.
Explaining this, the firm pointed out that almost nine times the average daily amount of Bitcoin was transferred to exchanges to be immediately sold off.
Regardless, the firm also explained that although the volume of Bitcoin inflow remains high, the asset’s price now seems to have stabilized and reached a comfort point. The firm asserted that the Bitcoin market is now out of the woods, as the oversupply seems to have cooled down now. Most likely, the excess Bitcoin left is for holders to keep and speculate.
The firm also provided some insights as to why the Bitcoin price has been able to level out after what was the worst single-day drop in the asset’s price for almost a decade. As it put it, transfers between 10 and 1,000 BTC accounted for about 70 percent of the entire currency flow through exchanges.
It added, “The majority of available Bitcoin was not cashed out, suggesting that most Bitcoiners are happy to hold. At 712,000 more than average, the amount of Bitcoin sent to exchanges in the last eight days is unprecedented. But this extra 712,000 represents just 5% of available Bitcoin (all mined Bitcoin minus all lost Bitcoin).”
Bitcoin Goes Comfortably Green
As for any future predictions, however, the company explained that making any of those will be difficult at this time. In a period where traditional stock and bond markets seem to be on the slide, the crypto market hasn’t been immune to taking hits, and making any predictions concerning where the market will land will be almost impossible at this time.
Regardless, Chainalysis committed to continuing monitoring of Bitcoin’s movements with traditional indices.
“It’s hard to predict where the bitcoin market will go next. However, large increases in exchange inflows have proven to be a good indicator of increased volatility, so we recommend keeping an eye on the amount being transferred to exchanges,” it said in part.
Of course, investors will be more than happy to find that the asset is trading up once more, after spending about a week moving between significant losses and meager gains. Bitcoin is currently trading at $5,850 at press time, marking the first time it will be crossing the $5,500 point in almost a week. Today is also its first convincing double-digit gain, marking a contrast to the traditional stock market that has continued to stall.