Bitcoin (BTC) is currently succumbing to bear pressure as sellers overtake the market in the wake of growing volatility rocking the space. Although the trading volume is up by 16.62% in the past 24 hours to $60,970,666,264.24 at the time of writing, the price of the premier digital currency is down by 1.87% to $58,553.22.
The attempt to push Bitcoin’s price above the $60,000 psychological level is currently being rejected in the wake of continuous sell-offs being seen. As noted, the push to reclaim the $60,000 resistance level may also be unsustainable in the short term due to lower trading volumes in the market. By indication, there is a growing number of investors and traders in the market who are in search of Bitcoin to transfer to cold wallets, and not for use in active trading.
The interest in Bitcoin and cryptoassets, in general, has grown remarkably in the past months, as continuous growth in the price of the asset keeps attracting a new set of investors. While the older investors have scooped most of their holdings off the market, younger investors are also joining the trend.
The ongoing price drop in Bitcoin might have also been influenced by the drop in the total number of the cryptocurrency locked in Decentralized Finance (DeFi) smart contracts. At present, there are over 139K BTC locked in DApps as shown by DeFiPulse with the current value pegged at 139.318K BTC.
This figure has seen a steep decline from the level seen on March 04 to date. In the month-ago period, the total Bitcoin locked in these smart contracts topped 154,000 BTC, a shortage of about 15,000 BTC. These may be accounted for by two likely factors including a pullout to make more profits, or a pullout to cold storages. With the growing reduction in inflow to exchanges in the past month, the reduction in the number of Bitcoin-locked DeFi smart contracts is most likely influenced by the latter.
The overall impact may result in the drop in Bitcoin’s price in the short term but in the longer term, the generated scarcity if this trend continues may flip the price action.