The shrimps lost their fuse, and the whales returned to the Bitcoin sale

After a slight revival in the cryptocurrency market, the clouds thickened again, and the probability of a repeat test of the local minimum increased. More agile market participants took advantage of Bitcoin’s decline below $ 20 thousand, but profitable purchases did not add confidence in the future. As a result, bearish sentiment is again prevailing in the market.

In July, whales (>10 thousand BTC) and shrimp (<1 BTC) became the main investment force that helped the price rise above $20 thousand. But already in August, the whales returned to the sale of assets, and the shrimp fuse has almost dried up.

The whales can also include institutional investors who make transactions through cryptocurrency funds

In the first week of August, the inflow of investments into funds stopped, and in the second week, an outflow of $21 million was formed directly from Bitcoin.

One of the key signs of future price growth is an increase in network activity and the appearance of new addresses. The average monthly number of new addresses is less than the average for the year, which confirms the low activity and lack of potential for a bullish trend.

The weakness of the last rise of Bitcoin to $ 25 thousand and the continued strength of the bears is also demonstrated by the continued decline in the activity of traders with transaction volumes of less than $ 10 thousand. This group can be characterized as retail investors, subject to the moods of greed and fear. In a bull market, they are seized by FOMO (lost profit syndrome), and in a bear market, they fear a possible catastrophe.

The main reason for the decline in the cryptocurrency market lies in the ongoing series of bankruptcies of weak projects and the expectation of further tightening of the Fed’s monetary policy.

On August 25-27, the next Fed symposium will be held in Jackson Hole. The financial community assumes that at this event, Fed Chairman Jerome Powell will confirm the regulator’s intention to accelerate the reduction of the balance sheet, as well as outline plans for further raising the key rate to combat inflation. Investors’ nervousness is transmitted to financial markets: in recent days, not only the cryptocurrency, but also the American stock market has been declining.