Determining the number of investors who left the market can give us insight into the overall sentiment in the industry and help us to determine if the market is set for recovery or will keep reaching new lows. According to CryptoQuant data, it is not as bad as one might expect.
To determine the rough percentage of investors who left the market, we can take a look at such data as capitalization of the biggest assets on the market. At first, it may seem that a larger portion of the industry has left it for better times, especially after we see a 70% capitalization plunge on Bitcoin and Ethereum.
Everyone is talking about bearish things, but most of them haven't left the crypto market. They're just waiting for the bottom.#Bitcoin marketcap decreased by -70% from the top while stablecoin went down by just -11%. pic.twitter.com/dhgDzi9g2A— Ki Young Ju (@ki_young_ju) June 30, 2022
But calculating the number of investors who left the space by comparing capitalization of volatile assets like Bitcoin over different periods would be inaccurate. Instead, the analyst suggested looking at the capitalization of stablecoins.
In the case of stables, we see "only" an 11% dive in capitalization, which shows that the cryptocurrency took less damage than anticipated by the majority of bearish analysts and economists.
Such a strong drop in the value of various cryptocurrencies is most likely the result of lacking liquidity. With the plunging price of assets like Bitcoin and Ethereum, users "Tether out" but do not move their funds out of the digital space, meaning they would most likely put them back after market sentiment normalizes.
Unfortunately, it is not the case for now as Bitcoin failed to hold above $20,000 and break local resistance levels due to lack of buying power on the market and fading volume between June 18 and June 26. At press time, BTC trades at $19,380.