Bitcoin’s collapse occurred smoothly throughout yesterday, with a larger and more dramatic drawdown from 62k to 58k occurring around midnight. Here’s a 15-minute chart of the cryptocurrency’s exchange rate that shows such changes.

15-minute chart of the Bitcoin BTC exchange rate on the Binance exchange

The market collapse was a surprise for investors. Still, the day before, analysts separately emphasised the positivity in the field of crypto.

The reason for it first of all will be further reductions in the base interest rate by representatives of the U.S. Federal Reserve System, the first of which is scheduled for 18 September. Also on the mood of buyers of crypto is influenced by the strengthening of Donald Trump’s position in the upcoming elections.

The current state of the Bitcoin Investors’ Fear and Greed Index

Be that as it may, the niche coin has experienced a drawdown. With this in mind, the Bitcoin Investors Fear and Greed Index has dropped to a score of 30 out of 100, indicating that buyers are fearful and reluctant to open new positions.

What will happen to the Bitcoin exchange rate

According to analysts at CryptoQuant, the network saw one of the largest net outflows of coins from exchanges in a day in 2024 on 27 August. The total net outflow on that day amounted to just under 45 thousand BTC, making this figure the third in the ranking of record-breaking results of the year.

The first two records were set on 5 and 16 July, when net coin outflows totalled around 52 thousand BTC and 68,500 BTC respectively. The difference in the number of withdrawn coins turned out to be significant, but the figures themselves are comparable to each other.

Outflow and inflow of BTC bitcoins to exchanges

Experts explained the recorded statistics. The corresponding replica is cited by Cointelegraph.

Large outflows of cryptocurrency usually indicate bullish sentiment in the crowd. They indicate that investors are moving their bitcoins off exchanges for potential long-term storage, thereby reducing selling pressure in the market.


In the case of other cryptocurrencies, the exodus could signify not only a desire to move digital assets onto hardware wallets for long-term storage, but also the willingness of owners to use crypto in the decentralised finance industry. For example, coins can be sent to a lending platform to generate additional returns that are generated by the interest paid by other users for their loans.

It is important to note that platforms from the DeFi sector continue to be a serious tool to popularise certain instruments. For example, the day before, the market capitalisation of the PYUSD stablecoin took the billion dollar level for the first time.

Firstly, the token was previously launched on the Solana network, which led to an increase in the number of tokens issued and outpaced the corresponding offer on the Etherium network. Secondly, initiatives on platforms from decentralised finance played a role, as confirmed by 21-co spokesperson Tom Wang. For example, users of the Kamino, Drift and Marginfi lending platforms can receive additional bonuses for PYUSD deposits, making this staple more attractive.


Number of active addresses that interact with the PYUSD stablecoin

The withdrawal has affected the total BTC balance on the major trading platforms tracked by the CryptoQuant platform. Specifically, as of 27 August, the exchanges held around 2,633,391 BTC. This figure is 12.5 percent lower than the result of 3,011,975 BTC as of January 1.

Bitcoin BTC balance on centralised cryptocurrency exchanges

Alas, Bitcoin also has some negative factors on the horizon that could lead to the continuation of a longer-term correction. One of them is the ongoing plan to rehabilitate the Mt. Gox exchange.

Its creditors are still receiving compensation in the form of BTC and BCH following the platform’s collapse. Some of them immediately sell coins, which affects the situation with coin rates and somehow restrains the continuation of the current bullrun.

But Bitfinex analysts can build a forecast for the future growth of BTC value using external factors, as Bitcoin’s correlation with the US stock market has been growing for more than a month.

This can be clearly seen in the dynamics of various asset classes during the Japanese yen crisis earlier this month and after the statements of US Fed chief Jerome Powell last week.

Change in the value of the S&P 500 index

According to the latest release of the Bitfinex Alpha report, the linear correlation coefficient, which measures the relative relationship of BTC to the S&P 500 and NASDAQ indices, has increased markedly. This rise began on 12 July, but BTC has been relatively weaker than the indices since falling on 5 August.

Following Fed Chairman Jerome Powell’s statements at the Jackson Hole Symposium on 23 August, the crypto market, stock market indices and risk assets rose significantly, continuing the recovery seen since early August.

This surge can be explained by Powell’s suggestion that the Fed is preparing to adjust monetary policy and cut rates. But the US dollar index fell by more than 0.83 per cent.

Changes in the value of the Nasdaq index

According to CryptoPotato sources, the S&P 500 index reached 5,461 points, down 0.7 percent from its all-time high. Other assets, including gold, also recorded a notable rally.

Change in the value of gold

On the other hand, BTC’s daily rise was 6 percent, the second biggest daily jump since May 20. Analysts said the price jump signalled a return of risk appetite to the markets.

Although despite Bitcoin’s rally the day before, it remains weaker than equities. This means that analysts hope that the correlation dependence will still pay off and BTC will “pull up” in terms of growth rate to the stock market.


The current situation on the coin market is part of the consolidation period, which came after the industry collapse shortly after Bitcoin reached its new all-time high in mid-March. Experts generally consider what is happening to be the norm. Still, such recoveries and the purchase of coins by investors are a necessity for the bullrun to continue.