Bitcoin Slips Under $91,000 As Crypto Inflows See 56% Decline

Bitcoin Slips Under $91,000 As Crypto Inflows See 56% Decline

Bitcoin continued its bearish price movement as on-chain data showed that inflows into the cryptocurrency market saw a sharp decline recently.

Cryptocurrency capital flows have seen a significant decline recently

As analyst Ali Martinez explained in New mail On X, capital inflows into the cryptocurrency sector have slowed over the past month. Capital enters (or exits) the digital asset market through three main asset classes: Bitcoin (BTC), Ethereum (ETH), and stablecoins. Once flows reach these currencies, they are rolled over to altcoins.

Therefore, it can be assumed that the flows related to these assets represent net flows for the cryptocurrency sector as a whole. As for how flows are calculated, the Realized Cap indicator can be used in the case of Bitcoin and Ethereum.

Realized Cap is an on-chain capitalization model that determines the total value of any given asset by assuming that the true value of any token in circulation is equal to the price it was last transacted on the network.

The last transaction for any currency will likely be the last point at which it was traded, so the price at that time will indicate the current cost basis. Since the realized cap sums this value for all tokens in circulating supply, it essentially measures how much capital investors as a whole have put into the asset.

The net capital outflows of Bitcoin and Ethereum can be equated to the changes occurring in this indicator. For stablecoins, there is no need for this model since their price is always fixed at $1, so changes in their aggregate market value are a sufficient means of finding capital flows.

Now, here’s the chart shared by the analyst that shows the trend in 30-day flows related to the three asset classes over the past few months:

As shown in the chart above, total net flows related to the cryptocurrency sector have been positive over the past few months, implying that a net amount of capital has entered various assets.

However, 30-day inflows appear to have peaked last month, as they have since been tracking a downward trajectory. In this period, the value of the measure fell from $134 billion to $58 billion, representing a decline of more than 56%.

“This indicates a significant decline in investment activity,” Martinez points out. A slowdown in capital flows may be the reason why Bitcoin and other assets have turned on a downward trajectory recently.

Bitcoin price

Bitcoin briefly fell below the $91,000 level earlier in the day, but it appears that the coin has since bounced back above it with its price now trading at around $91,800.

Bitcoin price chart

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