Sustained selling pressure has impacted Bitcoin as exchange deposits increased due to bearish market sentiment.

Recent data shows that over 21,000 Bitcoin (BTC) were sent to centralized exchanges in the past week. The total amount of BTC transferred exceeded an estimated $1.2 billion, with the token trading around $55,000 on Friday.

Why is Bitcoin Declining?

Bitcoin has experienced a 21% decline over the past month, driven by several factors:

  • Macroeconomic factors
  • Institutional capitulation
  • Government sales
  • Creditor repayments
  • Market uncertainty

Inflation data in the U.S. showed signs of slowing but not enough to trigger interest rate cuts from the Federal Reserve. The central bank has maintained its tighter monetary policies, reducing risk appetite as it targets 2% inflation.

Following the halving, which reduced block rewards by 50%, some miners liquidated millions in crypto to cover business expenses. This trend may have slowed even as BTC remained below its $73,000 peak in March and continued a sideways or downward pattern since April. Mining stocks also declined during the last dip.

Market Reactions and Trends

Spot BTC ETF flows have stagnated, and trading volumes for BTC-backed products on Wall Street have mirrored price movements. Authorities in Germany and the U.S. have sent thousands of Bitcoin to exchanges in the last two weeks. A German lawmaker criticized the government’s BTC sell-offs, suggesting the crypto should be used as a reserve asset.

In the U.S., officials moved $240 million of seized Silk Road BTC to Coinbase, typically intending to sell in open markets. Observers noted that the U.S. uses a platform the Securities and Exchange Commission has sued for alleged federal violations.

Bitcoin’s 2% decline on Friday was partly due to Mt. Gox repayments. The defunct crypto exchange began user reimbursements 10 years after one of the largest BTC hacks to date.

Overall Market Impact

The total cryptocurrency market has been on a widespread downswing, led by Bitcoin’s decline over the past few months. The digital asset industry lost 8% in 24 hours, dropping to $2 trillion, a five-month low. However, cryptocurrencies have collectively surged 24% in six months and 73% over the last year.

Stay updated with the latest cryptocurrency news on Global Crypto News.