Large cryptocurrency holders have stopped buying bitcoin

According to cryptocurrency analysts, large investors have stopped buying BTC $60,856.92 Bitcoin -2.74% Market capitalization $1.2 trillion VOL. 24 hours $1.35 billion en masse due to low market liquidity. Given that crypto exchanges do not trade with BTC, any large buy or sell orders can significantly affect the value of the flagship cryptocurrency.

What does market liquidity mean? If liquidity is high, a digital asset can be bought or sold quickly and easily without much impact on its price. Low liquidity means that cryptocurrencies cannot be bought or sold quickly, and large transactions affect the value of assets.

According to Bitfinex experts, the depth of the cryptocurrency market (the amount of activity on the market that does not cause price changes) is currently too low. Therefore, any large order from investors will have twice the impact on the bitcoin price chart than it did a few months ago. «The situation of bitcoin is now seriously frightening crypto investors, whose investment risks have increased significantly,» Bitfinex experts emphasized.

It should be noted that in 2022, institutional investors invested only $ 433 million in cryptocurrencies. This was the worst figure since 2018. The significant drop in investment in 2022 was caused by market volatility, major upheavals in the industry (such as the Terra and FTX collapses), and a noticeable increase in regulatory control. That is why, according to experts, a 95% reduction in crypto investments compared to 2021 is quite expected.