An analyst from CryptoQuant has suggested that the recent market-wide slump could indicate a potential bottom for cryptocurrencies.

The total cryptocurrency market has dropped by more than 7% over the past week and over 3% in the past month. Notably, Bitcoin (BTC) fell below the $65,000 mark, while altcoins experienced significant corrections.

Altcoins, known for their higher volatility compared to Bitcoin, have seen a more substantial decline, losing over 4% of their market value in the last 30 days. During the same period, BTC has decreased by around 3%, appearing to be in a sideways trading pattern.

Miner Capitulation

According to a CryptoQuant report, miner capitulation has been a major factor in the drop of the total market cap to $2.4 trillion. Following the Bitcoin halving, block rewards were reduced by 50%, leading to a 55% decline in miner revenues.

This shift in market dynamics has compelled miners to sell more Bitcoin to cover business expenses, adding additional selling pressure on BTC and supporting its range-bound price movement.

Low Stablecoin Issuance

Stablecoins like Tether’s USDT and Circle’s USD Coin (USDC), which are pegged to the U.S. dollar, provide a stable medium for trading. Typically, increased issuance of stablecoins signals an influx of capital and liquidity into the cryptocurrency market. However, analysts have observed low levels of new stablecoin issuance, indicating a slowdown in new capital entering the digital asset space.

Crypto ETF Outflows

Spot Bitcoin ETFs from companies such as BlackRock and Fidelity had set Wall Street records by accumulating billions in assets within weeks. Recently, these funds have experienced outflows, exerting further downward pressure on Bitcoin prices and the broader digital asset market. Last week saw more than $600 million exit digital asset investment products following a hawkish Federal Reserve policy meeting.

“Historical trends suggest that periods of sustained low miner revenues combined with a high hash rate can indicate a potential market bottom,” stated a report.

Although the market has slowed, analysts believe that a market reversal is not out of the question in the short term.

For more updates and insights into the cryptocurrency world, continue exploring Global Crypto News.

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