Top Indicator Forecasts Major Crash as Crypto Market Nears Massive Capitulation

Bitcoin (BTC) faced a downtrend last week, closing below $67k as it struggled to surpass its recent all-time high (ATH). The leading cryptocurrency maintained a bearish trend on Monday, with the weekly Relative Strength Index (RSI) falling below 62 percent for the first time since October of last year.

The drop in Bitcoin below $66k has sparked fear across the crypto industry, leading to a significant withdrawal of over $92 million from crypto derivatives trading within the last 24 hours, primarily by long traders.

A recent analysis of on-chain data by CryptoQuant shows a significant decrease in the average inflow of stablecoins to $40 billion, down by more than half. On-chain and macro researcher Axel Adler views this decrease in stablecoin volume as a bearish indicator for the entire crypto market.

The average inflow volume of all stablecoins, specifically Ethereum ERC-20 tokens, has decreased by 2.1 times from $84 billion to $40 billion, signaling a bearish trend. If the volume drops below $30 billion, it could signify a deep correction phase.

In addition to reducing buying power, a decline in stablecoin volume also indicates a lack of much-needed liquidity during periods of heightened volatility. However, Adler suggests that a bullish sentiment can still prevail as long as the stablecoin volume remains above $30 billion.

Despite the increase in institutional adoption following the fourth Bitcoin halving two months ago, with the approval of various spot BTC ETFs in different regions, ongoing cash outflows from Grayscale’s GBTC have dampened bullish sentiment. This could result in a continued correction in Bitcoin price until buyers regain control in the short term. Nevertheless, industry experts remain optimistic about Bitcoin’s potential to surpass $150k in the current macro bull market.

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