Bitcoin’s velocity, a measure of how swiftly BTC units are moving around the network, has hit lows that were last seen before the Q4 2020 BTC price explosion, CryptoQuant data revealed. This slowdown in on-chain activity marks a noticeable stagnation of Bitcoin supply at its current price around $26,000, and has sparked various investor sentiments.
There exists an interesting dynamic here. On one side, it may be construed positively as it implies that whales, traders who hold a large amount of Bitcoin, are maintaining their holdings rather than selling. On the other hand, it’s seen as a negative development because Bitcoin is less frequently being transferred to new investors. A lively debate prevails, as the market seems to be in a ‘wait and watch’ mode.
During the end of 2020, this metric’s rebound was followed by Bitcoin’s first ascent past $20,000 to new record highs a year later. At its current valuation of $26,000, Bitcoin appears largely oversold per its daily relative strength index (RSI), indicating a subsequent recovery of investor interest might be imminent.
Closely related to this, ripple effects can be felt in other cryptocurrency spaces, especially with the Security and Exchange Commission (SEC) turning their attention towards Ripple Labs. Pro-XRP lawyer, John Deaton, argues that the SEC erred in filing aiding and abetting allegations against Ripple’s CEO Brad Garlinghouse, especially given former SEC officials’ testimonies that would have likely categorized XRP as a non-security early on.
There’s a feeling of disenchantment that the SEC ignored this information for a prolonged period. Clear elucidation from Clayton and Hinman could have bypassed legal hiccups and accelerated crypto adoption. In light of these arguments, the price of XRP continues to fluctuate as one major XRP whale moved over $20 million worth of the tokens to exchanges.
In conclusion, while on the surface the cryptocurrency market might appear dormant, beneath the tranquillity, currents of change are churning, shaping the future of digital currency. The Bitcoin velocity slowdown gives way to various interpretations, and Ripple wades through legal implications that could transform crypto regulations. As the crypto-space continues to witness these defining events, the marketplace anticipates to what extent these changes will sculpt tomorrow’s crypto-reality.
Source: Cointelegraph
