The crypto market investment inflows have dropped sharply by 56.7% over the last month, from $134 billion to $58 billion, signaling reduced investor activity.
The overall crypto market is facing strong pressure as Bitcoin BTC $67 574 24h volatility: 1.3% Market cap: $1.35 T Vol. 24h: $19.57 B and altcoins drag down further losing more than 1-5% in the last 24 hours. This massive selloff continues as inflows into the crypto market have tanked by more than 56% over the past month.
Citing data from blockchain analytics platform Glassnode, popular crypto analyst Ali Martinez reported that crypto investment activity has dropped by 56.7% over the past month, as inflows shrunk from $134 billion to just $58 billion.
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Source: Ali Charts
Furthermore, as per details shared by blockchain analytics platform Santiment, the crypto trading volumes tanked across various sectors such as Layer 1 and Layer 2 networks, meme coins, and AI tokens.
As of now, the trading volumes have dropped to levels last seen on November 4. This shows signs of “trading paralysis” in the market, which happens due to growing fear, uncertainty, and doubt (FUD) among investors, reported Santiment. However, the analytics firm suggests that such market conditions often precede potential rebounds, as reduced excitement can set the stage for recovery.
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Source: Santiment
Bitcoin price is once again seeing strong selling pressure dropping another 1.2% and slipping under $93,000 levels. As per data from Glassnode, the short-term holder (STH) cost-basis model for Bitcoin remains a key metric for assessing sentiment among newer investors. Historically, this model has been instrumental in identifying market lows during bull cycles and differentiating between bull and bear markets.
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Source: Glassnode
Currently, Bitcoin price is trading approximately 7% above the STH cost basis of $88,135. Analysts caution that if BTC stabilizes below this threshold, it could indicate declining sentiment among short-term investors.
Will Donald Trump’s Inauguration Help the Crypto Market Revive?
Everyone is currently betting on the Trump effect which could possibly kickstart a fresh crypto market rally moving ahead. With Trump promising to make America the crypto and expectations of a regulatory overhaul, market analysts are predicting major gains ahead.
However, the New York Digital Investment Group (NYDIG) stated that Trump’s crypto promises could take some time to materialize. NYDIG’s global head of research, Greg Cipolaro, advised against expecting rapid shifts in cryptocurrency policy following Donald Trump’s inauguration on January 20.
In a January 10 research note, Cipolaro acknowledged that the upcoming administration has sparked optimism about delivering on its campaign promises. However, he emphasized that “while some changes may occur swiftly, others could take time to materialize”. He further added:
“Key officials still need to be named, those that have been named need to go through the confirmation process, and then once confirmed they need to assemble their staff.”
Other key crypto legislations such as crypto rules for stablecoins, and the bill to clarify the SEC’s regulatory role, could take some time.
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