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Bitcoin price - what caused the drop to USD 10,500?

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Bitcoin price is over 4.5% negative in the daily range. What triggered the price drop from close to $ 11,000 to $ 10,500? According to analysts, this was due to several factors.

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Bitcoin price - a decrease of nearly 5%

While this fluctuation may seem minor compared to the historical ups and downs in BTC price, it's worth noting that the red wave has also flooded altcoins. The most popular ones, in turn, lost 5 to 10 or even 15%!

Yesterday's Bitcoin session was opened at USD 10,938 and closed around USD 10,462. This change was over 4%. While these are typical movements in the cryptocurrency market, some users have panicked - the indicator of fear and greed shows us that neutral sentiment has turned into fear.

bitcoin price weekly chart

It is worth noting that Monday was also not kind to stocks and commodities. It turns out, however, that the US dollar index shows a completely opposite tendency. Some try to link this phenomenon to the recurrence of fear related to the COVID-19 pandemic, arguing that people will once again arm themselves with cash.

Speculators flee Bitcoin in DeFi?

Recently, the value of USD blocked in the market of decentralized finance has risen to another high. The new record is over 13 thousand. USD - according to DeFi Pulse. In the meantime, there has been a landslide, and the current level is close to 9.5 thousand. USD.

Due to the high volatility of DeFi projects, many speculators have decided to enter this market. Some even claim that these users left BTC just for such tokens. Next to it, you could see a decrease in the number of addresses with a balance of 1 Bitcoin to the lowest level in the last 4 months. All of this coincided with a strong expansion into decentralized finance.

As it turns out, there has also been an increase in demand for wBTC - Bitcoin transferred to the Ethereum blockchain. In this way, users can use DeFi protocols without selling BTC.

It should also be mentioned here about the decrease in the number of weekly active investors depositing Bitcoin on cryptocurrency exchanges. According to the CryptoQuant platform, this is the lowest level in the last 3 years.

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