Bitcoin: How are investors reacting with BTC breaching $30k on the downside

ambcrypto.com:

Bitcoin, for the first time, did not lead the market into downfall as the reason behind cryptocurrencies’ price crash was twofold. One was the rising fear surrounding the rising inflation and a potential recession, and the second was the fall of the biggest decentralized non-collateralized stablecoin TerraUSD (UST).

The latter resulted in the selling of almost $3 billion worth of BTC within five days from the Luna Foundation Guard Reserve, leaving the balance of the $10 Billion reserves at just $110.82 million.

In the case of the former, it appears to be that investors have begun treating Bitcoin as a risk-on asset which is why most investors seem to have sold it off to protect their position of profits or to minimize losses.

And it does make sense since the king coin and the stock market now share a correlation of nearly 0.58, according to data obtained by CoinMetrics as of April 2022.

Bitcoin’s correlation to S&P 500 | Source: CoinMetrics

Regardless, investors have sold about 100k BTC in the span of five days, amounting to $3.17 billion. The move made sense as yesterday marked the day that Bitcoin holders experienced the most losses they ever had in the history of Bitcoin. 

With over 61k BTC worth over $1.94 Billion, noting losses across the network, investors weren’t expected to have much optimism.

Bitcoin network-wide losses | Source: Santiment – AMBCrypto

This lack of support was visible in their sentiment. Even those who bought their Bitcoin at prices under $30k were downhearted yesterday since recovery from such a low point will take time, killing their profits. Consequently, the lack of optimism concerning Bitcoin fell to the lowest point it had since February 2020.

Bitcoin investor sentiment | Source: Santiment –