Crypto Market Rally Stalls, Bitcoin Drops 5%

After reaching a high of almost $45,000 on 2 March, Bitcoin has dropped heavily in the past 2 days. The digital asset has decreased by more than 10% within the last 48 hours and reached a low of $40,600 on 4 March.

Overall, the digital assets have lost nearly $200 billion worth of market cap since 2 March. The plunge was led by Bitcoin. However, Ethereum, BNB, XRP and Cardano have dropped sharply during the mentioned period.

Earlier this week, the crypto market defied all odds and has jumped significantly. While volatility remained high across global financial markets, the trading activity increased enormously in the digital asset space due to its volatile nature.

Marcus Sotiriou, an Analyst at GlobalBlock, believes that despite the recent dip, some of the indicators of the Bitcoin network have remained strong.

“Despite the fall today, on-chain metrics from blockchain analytics firm IntoTheBlock shows that 180,000 Bitcoin has been withdrawn from exchanges this year, as the net flow has once again turned negative. The last time we saw outflow being consistently negative was in early November when Bitcoin reached a new all-time high. Bitcoin being withdrawn from exchanges is bullish as it indicates these market participants are long-term holders,” Sotiriou said.

Crypto Market in Russia and Ukraine

Crypto trading volumes in Russia and Ukraine have been surging over the past few weeks. Earlier this week, Ruble-denominated BTC volume reached its highest level since May 2021. Across Ukrainian markets, Bitcoin premium has increased as well.

“Crypto exchanges are being pressured to block Russian users. This puts exchanges in a difficult position. They clearly want to cement relationships with regulators and be on their side, but they also want to provide technology neutrally without being political. Binance CEO, CZ, has said that although they are complying with sanctions on Russian users, by restricting cardholders of sanctioned Russian banks, they will not be issuing a blanket ban on Russian users,” Sotiriou added.