3 reasons why the cryptocurrency market is plummeting

• Bitcoin’s 30-day MVRV has hit early 2021 bull market levels, leaving many investors with unrealized gains.
• On-chain metrics reveal miners are selling, adding headwinds to the ongoing rally.
• US banks cut ties with crypto exchanges, coupled with other developments, pile up.

Bitcoin price is one of the key reasons for the recent upward trend in the crypto market. Investors should be wary of sudden market drops as some altcoins continue to hit new highs.

3 vital signs indicating a U-turn

unrealized gains rampant

The Market Value to Realized Value (MVRV) indicator shows that many cryptocurrencies are overextended. This on-chain metric is used to determine the average profit/loss for investors who have purchased assets in the past month.

The amount of unrealized profit is directly proportional to the size of the rally. For Bitcoin, his MVRV for 30 days he surged to 27%. This shows the average profit of all addresses that bought his BTC in the past month.

For ETH, this figure peaked at 19.6%, but over the past 24 hours, many investors have already posted profits, resulting in the price of Ethereum dropping from $1,621 to $1,524. . In response, his 30-day MVRV shows that the average profit of all addresses that bought ETH in the last month fell from 19.6% to 7.53%.

BTC, ETH 30 days MVRV

Bitcoin Miners Still Real

Bitcoin miners continue to sell to Larry, and this is clearly shown in the Miners Position Index (MPI). This metric is calculated by taking the ratio of the number of miners sending mined coins to exchanges and the number of miners sending to other addresses.

A high MPI value indicates more miners are sending coins to the exchange. This is generally seen as a bearish signal that miners are selling their crypto holdings.

The MPI surged to 3.96 on January 14, and Bitcoin’s price hit $20,957 and continues its surge. The move from Minor adds headwinds to the ongoing rally and leads to consolidations that could lead to a sale.

BTC MPI

On top of that, heaps of “bad” news

Regulators are cracking down on all cryptocurrencies after 2021’s major misfortunes involving major players like Terra, FTX and Three Arrows Capital (3AC). Additionally, Grayscale and its parent company, Digital Currency Group (DCG), have found themselves weighing on the market.

This sudden and unexpected rally is just that. It may be profitable so far, but investors should watch out for sudden U-turns triggered by market events. One of the recent reports is that Signature Bank is limiting the minimum buy-in amount for cryptocurrency partners and users to $100,000.

The latest report shows that regulators have seized $50 million of Sam Bankman-Fried at an unnamed Farmington State Bank outside Washington.