So far the peak of this bull run, in terms of total market cap, happened in mid-December when it pumped to over $3.7T while the Bitcoin price hit a new ATH of over $107k.
And here we are, a few weeks later, with the BTC price now below $94k while total market cap is now below $3.25T. Altcoins suffered a lot during this downturn as well as Ethereum, Solana, or Dogecoin – all suffer double-digit plunges.
Whale Activity and Investment Flows Show Warning Signs
Crypto analyst Ali Martinez recently shared two worrying indicators with his 112k followers on X. The data shows a dramatic 51.64% decrease in large Bitcoin transactions over the past month, with numbers falling from 33,450 to 16,180. This substantial decline in whale activity suggests large holders might be taking a step back from the market.
Even more concerning is the significant drop in capital inflows. According to Martinez, money flowing into the cryptocurrency market has decreased by 56.70% over the past month, plummeting from $134 billion to $58 billion. This sharp decline in investment activity indicates a broader hesitation among investors to commit new capital to crypto assets.
Adding to these concerns, Santiment has reported a notable drop in crypto trading volume, describing the current situation as ‘trading paralysis.’ According to their analysis, major projects across Layer 1’s, Layer 2’s, meme coins, and AI tokens haven’t seen such low trading levels since November 4th. This lack of market excitement typically indicates a period of Fear, Uncertainty, and Doubt (FUD) among traders.
The approaching political transition, with Trump’s anticipated return to office in seven days, may be contributing to this cautious sentiment. Many large investors appear to be staying on the sidelines, waiting to see how the political changes might affect the crypto markets.
While Santiment suggests that such periods of low activity can increase the probability of market rebounds, the current combination of reduced whale activity and lower trading volumes points to a period of continued market uncertainty.
Read also: Could SUI Be the Solana (SOL) of This Cycle? Insight From Top Crypto YouTuber
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